When Adding a Randomly Chosen New Stock to an Existing

question 61

True/False

When adding a randomly chosen new stock to an existing portfolio, the higher (or more positive) the degree of correlation between the new stock and stocks already in the portfolio, the less the additional stock will reduce the portfolio's risk.

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Definitions:

Sacrifice

An act of giving up something valued for the sake of something else regarded as more important or worthy.

Compound Propositions

Statements formed by combining two or more propositions with logical connectives, such as "and," "or," "if...then."

Categorical Propositions

Statements in logic that relate two categories or classes of things in an affirmative or negative manner.

Disjunctive

Pertaining to a logical relation that holds between two statements if at least one of them is true, most commonly represented by the "or" connective.