If There Is No Diversification Benefit Derived from Combining Two

question 44

Multiple Choice

If there is no diversification benefit derived from combining two risky stocks into one portfolio,then the

• A)returns on the two stocks must move perfectly in sync with one another.
• B)returns on the two stocks must move perfectly opposite of one another.
• C)stocks must have a zero correlation.
• D)portfolio is equally weighted between the two stocks.
• E)two stocks are completely unrelated to one another.

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Definitions:

Pollen Grain

A microscopic body that contains the male reproductive cells of plants; it is capable of fertilizing the female ovule.

Endosperm

The part of a seed that acts as a food store for the developing plant embryo, usually rich in starch or oil.

Developing Embryo

The early stage of growth and development in multicellular organisms, following fertilization and before birth or hatching.

Male Gametophyte

The haploid stage in the life cycle of plants that produces and contains male gametes or sperm cells.