The Only Condition Under Which the Unsystematic Portfolio Risk Can

question 70

True/False

The only condition under which the unsystematic portfolio risk can be reduced to zero is to combine securities that are perfectly negatively correlated (r = −1.0) with each other.

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Definitions:

Modeling

A method of learning that involves observing and mimicking the behavior of others.

Ineffective Punishment

A form of discipline that fails to decrease the occurrence of a behavior; it may lack consistency, immediacy, or connection to the specific behavior.

Fear

A basic emotion induced by a perceived threat, leading to confrontation with or avoidance of said threat.

Rebellious

describes a person, behavior, or action showing a desire to resist authority, control, or convention.