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:

Self-Consciousness

The state of being overly aware of oneself, one's appearance, or one's actions, often leading to excessive evaluation or adjustment based on perceived observation.

Anxiety

A feeling of worry, nervousness, or unease, typically about an imminent event or something with an uncertain outcome.

MBTI

The Myers-Briggs Type Indicator, a personality test that categorizes individuals into 16 personality types based on their preferences in perceiving the world and making decisions.

Sensing/Intuition

A concept often used in personality assessments to describe how individuals perceive and process information—sensing refers to perceiving through the five senses, while intuition involves seeing the big picture and patterns.