This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Optimal risk reduction takes place when combining assets whose correlation coefficient is 0.0. ... (Read 103 times)

littleanan

  • Hero Member
  • *****
  • Posts: 575
on: Jul 10, 2018
Optimal risk reduction takes place when combining assets whose correlation coefficient is 0.0.
 
  Indicate whether the statement is true or false.

Question 2

The truly wonderful thing about diversification is that 100 of risk can be diversified away, given a large enough portfolio.
 
  Indicate whether the statement is true or false.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

diana chang

  • Sr. Member
  • ****
  • Posts: 288
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: FALSE
Explanation: Optimal risk reduction takes place when combining assets whose correlation coefficient is -1.0.

Answer to Question 2

Answer: FALSE
Explanation: Only unsystematic risk can be diversified away, not total risk.


littleanan

  • Member
  • Posts: 575
Reply 2 on: Jul 10, 2018
Excellent

hramirez205

  • Member
  • Posts: 345
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

Did you know?

Patients who have been on total parenteral nutrition for more than a few days may need to have foods gradually reintroduced to give the digestive tract time to start working again.

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

Did you know?

The newest statin drug, rosuvastatin, has been called a superstatin because it appears to reduce LDL cholesterol to a greater degree than the other approved statin drugs.

To make an ice pack, place crushed ice in a plastic bag, bleed the air out of it, and seal it. Wrap To make an ice pack, place crushed ice in a plastic bag, bleed the air out of it, and seal it. Wrap
Selected High-Risk Drugs for Older Adults Selected High-Risk Drugs for Older Adults
A ring link network reduces the number of wires it takes to interconnect all of the modules. A ring link network reduces the number of wires it takes to interconnect all of the modules.
Mobilize the ankle using the heels of the hands. Place the heels of the hands just under the ankle ... Mobilize the ankle using the heels of the hands. Place the heels of the hands just under the ankle ...
Place sheet or towel over area to be heated. Use sufficient heat barrier for the heat source used. ... Place sheet or towel over area to be heated. Use sufficient heat barrier for the heat source used. ...
Calculating the coefficient of inbreeding (F) for the offspring of a first cousin marriage Calculating the coefficient of inbreeding (F) for the offspring of a first cousin marriage
Video: Proteins

For a complete list of videos, visit our video library