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Portfolio managers pick stocks for their clients portfolios based on the investment objective of the portfolio and several other factors. One key consideration is each
Portfolio managers pick stocks for their clients portfolios based on the investment objective of the portfolio and several other factors. One key consideration is each stocks contribution to portfolio risk and its statistical relationship with the portfolios other stocks.
Based on your understanding of portfolio risk, identify whether each statement is true or false.
Statement
True
False
Portfolio risk will decline if more stocks that are negatively correlated with other stocks are added to the portfolio.
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