In a Portfolio Containing 10 Securities, the Number of Unique

question 3

Multiple Choice

In a portfolio containing 10 securities, the number of unique correlations is:

• A) 10.
• B) 45.
• C) 90.
• D) 100.

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Definitions:

Compounded Continuously

The mathematical limit that investment interest can grow to when it is compounded infinitesimally.

Borrowing Money

The act of obtaining funds from another party, often a financial institution, under the agreement to pay back with interest.

Nominal Rate

The interest rate stated on a loan or investment agreement, not taking into account the effects of inflation, and often differing from the real rate of interest.

Compounded Semi-annually

An interest calculation method where interest is added to the principal sum of a deposit or loan twice a year, leading to compound interest.