Combining Positively Correlated Assets Having the Same Expected Return Results

question 102

Multiple Choice

Combining positively correlated assets having the same expected return results in a portfolio with___________level of expected return and ___________level of risk.

• A) a higher; a lower
• B) the same; a lower
• C) a lower; a higher
• D) the same; a higher

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Definitions:

Longevity

The length of time an individual or entity has been in existence or operational, often used in the context of work tenure or product durability.

Defined Contribution Plans

Retirement plans in which employees contribute a fixed amount or percentage of their salaries, and the final benefits depend on the plan's investment performance.

Mandatory Benefits

Benefits that employers are legally required to provide to their employees, including social security, workers' compensation, and unemployment insurance.

Total Compensation

The complete pay package for employees, including all forms of money, benefits, services, and in-kind payments.