-If You Were to Create a Portfolio Designed to Reduce

question 25

Multiple Choice

$$\begin{array}{l}\text { Expected Return (\%) }\\\begin{array} { c c c c } \text { Year } & \text { Asset A } & \text { Asset B } & \text { Asset C } \\\hline 1 & 6 & 8 & 6 \\2 & 7 & 7 & 7 \\3 & 8 & 6 & 8\end{array}\end{array}$$
-If you were to create a portfolio designed to reduce risk by investing equal proportions in each of two different assets, which portfolio would you recommend?

• A) Assets A and C
• B) Assets A and B
• C) none of the available combinations
• D) cannot be determined

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