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Author Question: By incrementally adding securities to a portfolio (Read 36 times)

mwit1967

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on: Apr 25, 2021

Question 1

Bond prices rise when interest rates fall. These two variables (bond prices and interest rates) are
◦ not correlated.
◦ positively correlated.
◦ negatively correlated.
◦ positively skewed.

Question 2

By incrementally adding securities to a portfolio
◦ you can reduce portfolio risk only if the new security is uncorrelated with the others in the portfolio.
◦ you raise portfolio risk since having more securities in a portfolio increases the likelihood that one of them will become worthless.
◦ you may reduce portfolio risk, even if new securities are not negatively correlated with others in the portfolio.
◦ you may eliminate all risk with about 15 different stocks in a portfolio.
◦ you reduce risk at an increasing rate.
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by mwit1967 on Apr 25, 2021

olivia_paige29

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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mwit1967

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Reply 2 on: Apr 25, 2021
Wow, this really help

Dinolord

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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