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Which of the following statement about the two-asset portfolio diversification is correct? The higher the correlation of assets in the portfolio, the more diversification of
Which of the following statement about the two-asset portfolio diversification is correct? The higher the correlation of assets in the portfolio, the more diversification of the II. When the two assets are perfectly positively correlated, there is no diversification eff III. When the two assets are perfectly negatively correlated, we can construct a risk free IV. When the two assets are not correlated at all, there is no diversification effect. A. I & II
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