Some Diversification Benefits Can Be Achieved by Combining Securities in a Portfolio

question 72

Multiple Choice

Some diversification benefits can be achieved by combining securities in a portfolio as long as the correlation between the securities is ________.

• A) 1
• B) less than 1
• C) between 0 and 1
• D) less than or equal to 0

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Definitions:

Radio Broadcasting

The transmission of audio content to the public through radio waves, allowing for real-time communication and entertainment.

Nationwide Medium

This term refers to a communication platform or channel that has the capability to broadcast, distribute, or reach audiences across an entire nation.

Translation Exposure

The potential for a company's financial statements in foreign currencies to be affected by fluctuations in exchange rates.

Financial Statements

are formal records of the financial activities and position of a business, individual, or other entity, typically including the balance sheet, income statement, and cash flow statement.