Question
Use the following three statements to answer this question: I. When the correlation between securities is less than one, there is a benefit to combining
Use the following three statements to answer this question:
I. When the correlation between securities is less than one, there is a benefit to combining them into a portfolio. II. An equally weighted portfolio of two securities which have a perfect negative correlation (ie. -1) is risk-free. III. It is impossible to use diversification to eliminate all the risk in a portfolio.
Question 30 options:
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| a) | I is correct, II is incorrect, III is correct. |
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| b) | I is incorrect, II is correct, III is correct. |
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| c) | I and II are correct, III is incorrect. |
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| d) | I, II and II are incorrect. |
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| e) | None of the listed answers |
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Financial Management Principles And Applications
Authors: Dr. S. Kr. Paul, Prof. Chandrani Paul
1st Edition
1647251664, 9781647251666
