Question
The insurance principle states that the risk of an equally weighted portfolio of uncorrelated risky assets converges to one as the number of assets increases.
The insurance principle states that
the risk of an equally weighted portfolio of uncorrelated risky assets converges to one as the number of assets increases.
investors should always be fully insured.
the risk of an equally weighted portfolio of uncorrelated risky assets converges to infinity as the number of assets increases.
the risk of an equally weighted portfolio of uncorrelated risky assets converges to zero as the number of assets increases.
irrational decision makers always take on too much insurance.
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Business Forecasting
Authors: John E. Hanke, Dean Wichern
9th edition
132301202, 978-0132301206
