To Reduce Risk as Much as Possible, You Should Combine

question 51

Multiple Choice

To reduce risk as much as possible, you should combine assets which have one of the following correlation relationships?

• A)strong positive
• B)slightly positive
• C)slightly negative
• D)strongly negative
• E)zero

---

Definitions:

Consideration Transferred

The payment made by an acquiring entity to purchase another entity, which can be in the form of cash, assets, or other financial instruments.

Book Value

The net value of a company’s assets as recorded on its balance sheet, which is calculated by subtracting total liabilities from total assets.

Indefinite Life

Indefinite life refers to the characteristic of an intangible asset that does not have a foreseeable limit to the period over which it is expected to generate economic benefits for its owner.

Consolidated Balance Sheet

A financial statement showing the aggregated financial position of a parent company and its subsidiaries.