Question
You observe that two stocks have a correlation coefficient of 1. Which of the following must be true? a) The stocks cannot be combined to
You observe that two stocks have a correlation coefficient of 1. Which of the following must be true?
a) The stocks cannot be combined to reduce portfolio risk.
b) The covariance of the two stocks must be at least 1.
c) The assets can be combined to create a portfolio with no risk.
d) The two companies must be within the same industry.
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Multinational Finance
Authors: Kirt C. Butler
3rd Edition
0324177453, 978-0324177459
