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The diversification effect of a portfolio of two stocks: Both increases as the correlation between the stocks declines; and decreases as the correlation between the

The diversification effect of a portfolio of two stocks:

Both increases as the correlation between the stocks declines; and decreases as the correlation between the stocks rises.

None of these.

The diversification effect of a portfolio of two stocks:

increases as the correlation between the stocks rises.

increases as the correlation between the stocks rises.

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