If ABC Inc

question 19

Multiple Choice

If ABC Inc. and XYZ Inc. have returns that are perfectly positively correlated:

• A) adding XYZ Inc to a portfolio that consists of only ABC Inc. will reduce risk.
• B) adding ABC Inc to a portfolio that includes only XYZ Inc. will increase risk.
• C) adding XYZ Inc. to a portfolio that consists of only ABC Inc. will neither increase nor decrease the risk of the portfolio.
• D) adding XYZ Inc to a portfolio that consists of only ABC Inc. will neither increase nor decrease idiosyncratic risk but will lower systematic risk.

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Definitions:

(E)-

A stereochemical descriptor indicating that two substituents are on opposite sides of a double bond or around a central atom in a molecule.

(Z)-Hex-3-Ene

A specific geometric isomer of hex-3-ene where the two highest priority substituents on either end of the carbon-carbon double bond are on the same side.

Mechanism

The detailed step-by-step description of how reactants are transformed into products in a chemical reaction, including intermediates and transition states.

Reaction

A chemical transformation whereby initial reactants undergo a change to produce final products, involving the rearrangement of atomic bonds.