The Variance of the Sum of Two Investments Will Be

question 57

True/False

The variance of the sum of two investments will be equal to the sum of the variances of the two investments when the covariance between the investments is zero.

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Definitions:

Money Supply

The aggregate monetary value within an economy, including cash, coins, and all balances in checking and savings accounts, at a given moment.

Interest Rates

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal.

Equilibrium GDP

The level of Gross Domestic Product where the total output of an economy equals the total demand.

Open Market

An economic system in which buying and selling of goods and services are conducted freely with minimal government intervention.