If General Auto and Crystal Auto Have Returns That Are

question 23

Multiple Choice

If General Auto and Crystal Auto have returns that are perfectly positively correlated, then adding Crystal Auto to a portfolio that already contains General Auto will

• A)reduce the risk in the portfolio.
• B)increase the risk in the portfolio.
• C)neither increase nor decrease the risk in the portfolio.
• D)reduce the risk in the portfolio only for risk-averse savers.

---

Definitions:

Above/Below Average

An analytical comparison indicating whether a value is greater than (above) or less than (below) the statistical average of a data set.

Banded Columns

A spreadsheet or database table display format where columns are alternately colored or shaded to enhance readability.

Fill Formatting

The process of applying background color, patterns, or images to a selected portion of a document or spreadsheet.

Banded Columns

Alternating column colors in a table or spreadsheet to improve readability.