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With respect to the risk / return graph: why is the shape of the graph a curve when the correlation is between -1 and 1?

  • With respect to the risk / return graph: why is the shape of the graph a curve when the correlation is between -1 and 1? Why is it a straight line in the other two cases?
  • What happens to portfolio risk as you invest in more than one asset?
  • What happens to portfolio risk as the number of assets increase?

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