To Construct a Riskless Portfolio Using Two Risky Stocks, One

question 50

Multiple Choice

To construct a riskless portfolio using two risky stocks, one would need to find two stocks with a correlation coefficient of ________.

• A) -0.5
• B) 0.0
• C) 0.5
• D) -1.0

---

Definitions:

Group Decision Making

The process by which multiple individuals come together to analyze problems, consider various solutions, and collectively make decisions, often involving compromise or consensus.

Advantages

The favorable conditions or benefits that make a specific situation or choice preferable over others.

Participation

The act of taking part or becoming involved in an activity or event, often contributing to a collective goal.

Effects

Refers to the outcomes or changes resulting from a specific cause or action.