Combining Shares with Perfectly Correlated Shares Returns into a Portfolio

question 48

True/False

Combining shares with perfectly correlated shares returns into a portfolio is less risky than holding an individual share since the portfolio will benefit from diversification.

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Definitions:

Sense of Touch

The ability to perceive and respond to changes in pressure, pain, temperature, and texture through the skin.

Basic Sensations

The fundamental experiences generated by sensory stimuli, such as sight, sound, smell, touch, and taste.

Pressure

The force applied perpendicular to the surface of an object per unit area over which that force is distributed.

Basic Taste

The fundamental groups of taste perceived by humans, typically described as sweet, sour, salty, bitter, and umami.