Which One of the Following Correlation Coefficients Must Apply to Two

question 32

Multiple Choice

Which one of the following correlation coefficients must apply to two assets if the equally weighted portfolio of those assets creates a minimum variance portfolio that has a standard deviation of zero?

• A)−1.0
• B)−.5
• C)0
• D).5
• E)1.0

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Definitions:

Rib Cage

The set of bones surrounding the chest that protects the heart and lungs.

Orbit

The bony cavity containing the eye, or alternatively, the path one object in space takes around another due to gravity.

Maxilla

The upper jawbone in most vertebrates, forming part of the skull and housing the upper teeth.

Occipital

Pertaining to the occipital bone or region, located at the back and lower part of the skull, crucial for visual processing.