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Question 14 Which of the following is incorrect? a. Add stocks with perfect correlation with each other will reduce the portfolio risk b. Combining 2

Question 14

Which of the following is incorrect?

a. Add stocks with perfect correlation with each other will reduce the portfolio risk

b. Combining 2 stocks that has a negative correlation with each other in a portfolio will reduce the portfolio risk.

c. Combining 2 stocks that has a correlation of coefficient of 0.5 in a portfolio will reduce the portfolio risk.

d. Add a stock that has the perfect correlation with the existing portfolio with each other will not reduce risk

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