Given a Simple Portfolio of Two Shares with 50% Weighting

question 12

True/False

Given a simple portfolio of two shares with 50% weighting each whose rates of return are perfectly negatively correlated, there is no diversifiable risk.

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Definitions:

Dominance Hierarchy

A social organization in which individuals within a group are ranked relative to one another in terms of dominance and submission.

Social Groups

Collections of individuals who interact with each other, share similar characteristics, and collectively have a sense of unity or identity.

Classical Conditioning

Type of learning whereby an unconditioned stimulus that elicits a specific response is paired with a neutral stimulus so that the response becomes conditioned.

Imprinting

Learning to make a particular response to only one type of animal or object.