Maximum Diversification Benefit Can Be Achieved If One Were to Form

question 141

Multiple Choice

Maximum diversification benefit can be achieved if one were to form a portfolio of two stocks whose returns had a correlation coefficient of:

• A) -1.0
• B) +1.0
• C) 0.0
• D) none of the above

Recognize key innovations and their impacts on industrial development.

Learn about significant companies and legal cases that shaped the American industrial landscape.

Understand the theory of Social Darwinism and its influence.

Analyze social and economic aspects of the marriage market and consumer behavior.

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Definitions:

Accelerator Effect

Refers to the phenomenon where an increase in national income results in a proportionally larger increase in investment spending due to expected higher demand for products.

Aggregate Demand

The sum of all demands for products and services in an economy, set at a particular price level and time period.

Aggregate Demand

Unified demand for all forms of goods and services in an economic landscape at a determined general price level throughout a certain time period.

Stabilize Output

An economic strategy aiming to maintain consistent levels of production and minimize fluctuations in an economy.