Combining Stocks with Perfectly Correlated Stock Returns into a Portfolio

question 13

True/False

Combining stocks with perfectly correlated stock returns into a portfolio is less risky than holding an individual stock since the portfolio will benefit from diversification.

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Definitions:

Endoplasmic Reticulum

A network of membranous tubules within the cytoplasm of a cell, involved in protein and lipid synthesis, and detoxification.

Nucleolus

A small, dense structure within the nucleus of a cell where ribosomal RNA (rRNA) is produced and assembled into ribosomes.

Golgi Apparatus

A complex of vesicles and folded membranes within the cytoplasm of most eukaryotic cells, involved in secretion and intracellular transport.

Endoplasmic Reticulum

A network of membranous tubules within the cytoplasm of a cell, involved in protein and lipid synthesis, and detoxification processes.