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In the context of portfolio theory, what does a positive covariance between two assets indicate? Question 3 4 Answer a . The assets have identical
In the context of portfolio theory, what does a positive covariance between two assets indicate?
Question Answer
a
The assets have identical returns.
b
The assets move in opposite directions.
c
The assets move in the same direction.
d
The covariance has no impact on the direction of asset movements.
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