Even If the Correlation Between the Returns on Two Different

question 36

True/False

Even if the correlation between the returns on two different securities is perfectly positive, if the securities are combined in the correct unequal proportions, the resulting portfolio can have less risk than either security held alone.

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Definitions:

Subjective Experience

Personal perceptions or feelings that are unique to the individual.

Cognitive Appraisal

The process by which an individual evaluates the significance of a particular event or situation to themselves.

Albert Ellis

An American psychologist who developed Rational Emotive Behavior Therapy (REBT), focusing on identifying irrational beliefs to change emotional and behavioral responses.

Diet

Diet comprises the sum of food and drinks consumed by an individual, impacting nutritional intake and health.