When Adding a Randomly Chosen New Stock to an Existing

question 61

True/False

When adding a randomly chosen new stock to an existing portfolio, the higher (or more positive) the degree of correlation between the new stock and stocks already in the portfolio, the less the additional stock will reduce the portfolio's risk.

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Definitions:

Insufficient Data

denotes a situation where there is an inadequate amount of information available to reach a conclusive decision or understanding.

Phobia

An intense, irrational fear of specific objects, scenarios, or situations that leads to significant anxiety and avoidance behavior.

Theory

A system of ideas intended to explain something, based on general principles independent of the thing to be explained.

Sociohistorical Context

The intersection of social and historical factors that influence the conditions or events being studied or observed.