A Completely Diversified Portfolio Will Have a Correlation with the Market

question 86

Multiple Choice

A completely diversified portfolio will have a correlation with the market portfolio that is which of the following?

• A) less than one because it carries only market risk
• B) less than one because it carries only diversifiable risk
• C) equal to one because it carries only diversifiable risk
• D) equal to one because it carries only market risk

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Definitions:

Internet

A global network of interconnected computers and servers allowing for the exchange of data, communication, and access to information.

Marketing Mix

The set of controllable tactical marketing tools, typically encapsulated as product, price, place, and promotion, that a company uses to produce a desired response from its target market.

Distribution

The process of making a product or service available for use or consumption by a consumer or business user.

Metamarket

A cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries.