Even If the Correlation Between the Returns on Two Securities

question 34

True/False

Even if the correlation between the returns on two securities is +1.0, if the securities are combined in the correct proportions, the resulting 2-asset portfolio will have less risk than either security held alone.

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Definitions:

Intersex

A general term used for a variety of conditions in which a person is born with reproductive or sexual anatomy that doesn't fit typical definitions of female or male.

Androgen Insensitivity Syndrome

A genetic condition where a person who is genetically male is resistant to male hormones (androgens), leading to the development of female physical traits despite having male XY chromosomes.

Phenotype

Set of individual characteristics that can be seen or measured.

Puberty

The period in human development during which adolescents undergo physical changes to reach sexual maturity.