The Diversification Effect of a Portfolio of Two Stocks

question 52

Multiple Choice

The diversification effect of a portfolio of two stocks:

• A) increases as the correlation between the stocks declines.
• B) increases as the correlation between the stocks rises.
• C) decreases as the correlation between the stocks rises.
• D) Both increases as the correlation between the stocks declines; and decreases as the correlation between the stocks rises.

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Definitions:

Social Selves

A concept in sociology that emphasizes the constructed nature of social identities, influenced by interactions and societal norms.

Identity Politics

Political positions based on the interests and perspectives of social groups with which people identify.

Social Movements

Collective efforts by groups of people to achieve a shared objective, often aimed at social change or resisting an aspect of society.

Non-Heterosexual Desires

Refers to any sexual desires or attractions that do not strictly adhere to heterosexual norms, encompassing a spectrum of identities beyond heterosexual.