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:

Myopia

A common vision condition in which close objects appear clearly, but distant ones don't.

Young Adulthood

A stage of human development that typically covers individuals aged 20 to 40 years, characterized by the pursuit of independence, career establishment, and often starting a family.

Dyslexia

A reading disorder characterized by problems such as letter reversals, mirror reading, slow reading, and reduced comprehension (from the Greek roots dys, meaning “bad,” and lexikon, meaning “of words”).

Word Recognition

The ability to identify and understand written words accurately and efficiently.