PLEASE ITS URGENT,PLEASE ITS URGENT,PLEASE ITS URGENT,

Let us say you hold a portfolio with two assets A and B. Can the risk of this portfolio be reduced to 0?

A Yes. As long as the correlation between the returns of A and B is -1, the risk of this portfolio is always 0.

B Yes. We need the correlation between the returns of A and B to be -1. We also need to hold the assets A and B in such an amount that the ratio of these amounts is proportional to the inverse of the variance for respective assets. As long as both conditions are met, the risk will always be 0.

C Yes. As long as the correlation between the returns of A and B is 0, the risk of this portfolio is always 0.

D Yes. We need the correlation between the returns of A and B to be 0. We also need to hold the assets A and B in such an amount that the ratio of these amounts is proportional to the variance for respective assets. As long as both conditions are met, the risk will always be 0.

E Yes. We need the correlation between the returns of A and B to be -1. We also need to hold the assets A and B in such an amount that the ratio of these amounts is proportional to the variance for respective assets. As long as both conditions are met, the risk will always be 0.