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Risk is not only measured in terms of losses, but also in terms of variability. The highest possible value for positive correlation is +1. Combining

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Risk is not only measured in terms of losses, but also in terms of variability. The highest possible value for positive correlation is +1. Combining assets with highly correlated returns will greatly reduce portfolio risk. When a company defaults on a secured debt, it is rare for the secured asset to be sold and the proceeds distributed to the debtor. Long-term bond prices are more volatile than short-term bond prices, given an equal percentage change in the interest rate

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