The Benefits of Portfolio Diversification Are Highest When the Individual

question 41

Multiple Choice

The benefits of portfolio diversification are highest when the individual securities have returns that:

• A)Vary directly with the rest of the portfolio
• B)Vary indirectly with the rest of the portfolio
• C)Are uncorrelated with the rest of the portfolio
• D)Are countercyclical

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Definitions:

Behavioural Interview

A method of interviewing where candidates are asked to describe past behavior as a predictor of future performance.

Stress Interview

A job interview technique designed to assess how applicants handle pressure by placing them under stress or discomfort.

Situational Interview

A job interview technique where candidates are asked to describe how they would handle hypothetical workplace scenarios.

Cognitive Test

An assessment designed to measure mental capabilities such as memory, reasoning, problem-solving, and comprehension.