The Diversification Effect of a Portfolio of Two Shares

question 68

Multiple Choice

The diversification effect of a portfolio of two shares:

• A)increases as the correlation between the shares declines.
• B)increases as the correlation between the shares rises.
• C)decreases as the correlation between the shares rises.
• D)Both A and C.
• E)None of the above.

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Definitions:

Tangentially Related

This term refers to items or topics that are somewhat related to each other but not directly connected or central to the main subject.

Interviewing Strategy

A planned approach to conducting interviews, designed to obtain relevant information effectively and efficiently.

Legal Mandates

Laws or regulations that require individuals or organizations to follow certain procedures or meet specific standards.

Ethical Intervention

Ethical intervention refers to actions taken with the specific intention of promoting fairness, respect, and ethical behavior, often in situations where moral principles are at risk.