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

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Definitions:

Blessed Curse

An oxymoron suggesting a situation or condition that appears to be advantageous (blessed) but has negative consequences (curse).

Native American Group

Indigenous peoples of the Americas, consisting of numerous tribes, nations, and ethnic groups each with their own distinct cultures and histories.

Ming Dynasty

A major Chinese dynasty that ruled between 1368 and 1644, known for its cultural achievements and the expansion of the Great Wall of China.