Question
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 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Sport Finance
Authors: Gil Fried, Timothy D. DeSchriver, Michael Mondello
4th Edition
1492559733, 978-1492559733
