A Two-Asset Portfolio with a Standard Deviation of Zero Can

question 14

Multiple Choice

A two-asset portfolio with a standard deviation of zero can be formed when

• A) the assets have a correlation coefficient less than zero.
• B) the assets have a correlation coefficient equal to zero.
• C) the assets have a correlation coefficient greater than zero.
• D) the assets have a correlation coefficient equal to one.
• E) the assets have a correlation coefficient equal to negative one.

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Definitions:

Capillaries

The smallest blood vessels in the body's circulatory system, responsible for the exchange of oxygen, carbon dioxide, and other substances between blood and tissues.

Bowman Capsule

A double-layered structure surrounding the glomerulus of each nephron in the kidneys, involved in filtration of blood to form urine.

Urine Flow

The process of elimination of liquid waste from the body through the kidneys, ureters, bladder, and urethra.

Ureter

A pair of tubes that carry urine from the kidneys to the bladder in the urinary tract system.