Assume Danny Is Considering Combining Two Investments to Form a Portfolio

question 54

Multiple Choice

Assume Danny is considering combining two investments to form a portfolio, and he is very concerned with the risk that will result from the combination. If he wants to attain the greatest effect from diversification, he would prefer that the assets _____. 

• A)are negatively related
• B)are positively related
• C)are not related at all
• D)have a negative coefficient of variation
• E)have a positive coefficient of variation

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Definitions:

Infant Development

The physical, emotional, behavioral, and cognitive growth that occurs in babies from birth to the end of the first year of life.

Prelinguistic Vocalizations

Vocal sounds made by infants before they acquire language, used to experiment with sounds, practice vocalization, and communicate needs or emotions.

Visual Recognition Memory

The capacity to recall and identify visuals that have been seen before.

Receptive Vocabulary

The number of words one understands.