If Two Events Are Positively Correlated but NOT Perfectly Correlated

question 101

Multiple Choice

If two events are positively correlated but NOT perfectly correlated, then

• A)diversification is not necessary since there is no risk.
• B)diversification eliminates all risk.
• C)diversification does not reduce risk at all.
• D)diversification can reduce risk.

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Definitions:

Sensory Memory

The shortest-term element of memory, which acts as a buffer for stimuli received through the senses and is capable of holding information for a very short period of time.

Fleeting Images

Fleeting images are brief, rapidly passing visual impressions that are not retained long in the memory.

Car Window

A transparent panel made of glass or other clear material, fixed or movable, that is part of a vehicle's door or body designed to allow light and visibility for occupants.

Information-Processing Model

A cognitive approach that likens the mind to a computer, focusing on how people process, store, encode, and retrieve information.