Question
Mr Monopoly is considering investing in two stocks - A and B. Which of the following statement(s) is true? If the correlation coefficient between A
Mr Monopoly is considering investing in two stocks - A and B. Which of the following statement(s) is true?
If the correlation coefficient between A and B is -0.5, the investor should not invest in both Stock A and Stock B at the same time.
If the correlation coefficient between A and B is 0.99, there are benefits to diversification
If the correlation coefficient between A and B is 0, there are no benefits to diversification.
None of the options
If the correlation coefficient between A and B is 1, there are benefits to diversification
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
11th edition
324422870, 324422873, 978-0324302691
