Maximum diversification would occur if the correlation between two assets was:

A) +1

B) 0

C) -1

D) -2

Although it was conceived in the 1950s, Markowitz analysis was not widely used for portfolio management until the 1980s. Why?

A) No one could understand the math

B) Implementation required large amounts of computing power.

C) Markowitz held the patent and wouldn't let others use it

D) It couldn't be used until the concept of "beta" had been invented

The risk free rate is 4% and the expected return on the market is 11%. If your portfolio has a beta of 2, what is your expected (or required) rate of return?

A) 7%

B) 11%

C) 14%

D) 18%

Which of the following may have something to do with causing the January Effect?

A) Tax Loss Selling

B) Insider Trading

C) Winter storms

D) Federal Reserve Policies