Owning Two Securities Instead of One Will Not Improve a Portfolio's

question 41

Multiple Choice

Owning two securities instead of one will not improve a portfolio's risk-return tradeoff if the two securities are:

• A) perfectly positively correlated with each other.
• B) perfectly independent of each other.
• C) perfectly negatively correlated with each other.
• D) of the same category,
• E)g. blue chips.

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Definitions:

Patient-Visits

A measure used in healthcare management to count the number of times patients receive clinical services.

Static Budget

A budget set for a specific level of activity that does not change, even if actual levels of activity change.

Total Overhead Cost

The comprehensive sum of all indirect costs involved in operating a business, not directly tied to a specific product or service.

Planning Budget

A budget prepared in advance of a specific budget period, serving as a financial plan for achieving strategic goals.