A Portfolio Consisting of Securities Whose Returns Are Highly Correlated

question 24

True/False

A portfolio consisting of securities whose returns are highly correlated is not truly diversified.

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Definitions:

External Evidence

Information obtained from independent sources outside an entity that can be used to support financial statement assertions.

Economic Performance

This term relates to how effectively an entity is utilizing its resources to generate income and manage its operations and investments.

Intangible Assets

Non-physical assets of value owned by a firm, such as patents, trademarks, goodwill, and copyright.