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Roger Holds a Portfolio Consisting of Two Stocks,A and B

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Essay

Roger holds a portfolio consisting of two stocks,A and B.Stock A has a standard deviation of 10% and Stock B has a standard deviation of 10%.The correlation coefficient of the two stocks is -1.Would Roger's portfolio exhibit greater diversification benefits if he added in a proportion of Stock C which is uncorrelated to both Stock A and Stock B?


Definitions:

Select Committee

A temporary or permanent legislative committee established to conduct investigations or consider specific issues not suitable for a standing committee.

Nuclear Option

A parliamentary procedure that allows the United States Senate to override a rule or precedent by a simple majority of 51 votes, rather than the two-thirds majority normally required.

Filibuster Rules

Regulations governing the use of filibuster in legislative bodies, determining how and when it can be employed to delay proceedings or block legislation.

Conference Committees

Special joint committees formed to reconcile differences in bills passed by the House and Senate, aiming to reach an agreement on a single version of the bill.

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