Showing what youve learned in this course, you are explaining to a friend that diversification within the portfolio is prudent. Adding which two of the following assets to his S&P500 portfolio would offer the most diversification benefit?

(1) Asset 1 with a correlation of +1

(2) Asset 2 with a correlation of +.5

(3) Asset 3 with a correlation of 0

(4) Asset 4 with a correlation of -.3

a.

2 and 4

b.

1 and 2

c.

3 and 4

d.

2 and 3