A Portfolio Combining Two Assets with Less Than Perfectly Positive

question 90

True/False

A portfolio combining two assets with less than perfectly positive correlation can increase total risk to a level above that of either of the components.

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Definitions:

Stockholders' Equity

Shareholders' equity in a corporation, which is the value of the assets that remains once all debts and obligations are deducted.

Revenues

The overall income received from selling products or services, which are essential to a firm's primary business.

Expenses

The money spent or costs incurred by a business in the process of earning revenue.

Common Stock

Common Stock represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits through dividends.