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The table below shows correlations between different asset classes. Small Cap Equity Large Cap Equity International Equity Emerging Mkt. Equity Small Cap Equity 1 Large

The table below shows correlations between different asset classes.

Small Cap Equity

Large Cap Equity

International Equity

Emerging Mkt. Equity

Small Cap Equity

1

Large Cap Equity

0.67

1

Inter. Equity

0.45

0.95

1

Emer. Mkt. Equity

0.43

0.83

0.37

1

Which portfolio would you prefer among the ones below (no calculation needed), briefly explain why:

A. A share portfolio consisting of International Equity and Large Cap Equity

B. A share portfolio consisting of Small Cap Equity and Large Cap Equity

C. A share portfolio consisting of Emerging Mkt. Equity and International Equity

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