A Portfolio of Two Negatively Correlated Assets Has Less Risk

question 92

True/False

A portfolio of two negatively correlated assets has less risk than either of the individual assets.

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Definitions:

Statutory Authority

Legal powers granted to an entity or individual by a statute, enabling them to enact or enforce laws.

Revocation

The action of withdrawing, cancelling, or annulling something previously granted, such as a right, license, or contract.

Captured Agency

A situation where a regulatory agency is dominated by the interests of the industry it is supposed to regulate.

Agency Officials

Individuals who hold positions of authority within governmental or organizational bodies, responsible for implementing policies and making decisions.