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:

Brain Development

The process involving growth and differentiation of the brain from infancy through adulthood, influencing cognitive abilities, motor skills, and emotional behaviors.

Atrophy

The wasting away or decrease in size of an organ or tissue in the body due to disease, injury, or lack of use.

Brain Development

The process of growth and change in the brain's structure, function, and capacity throughout the lifespan.

Growth Expressed

The demonstration or manifestation of personal or developmental advancement, often visible through changes in behavior, abilities, or understanding.