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The Only Condition Under Which Risk Can Be Reduced to Zero

question 89

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The only condition under which risk can be reduced to zero is to find securities that are perfectly negatively correlated (ρ = −1.0)with each other.


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Money owed to a company by its clients or customers for goods or services delivered but not yet paid for.

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Sales made by a business where payment is not received at the time of sale but is instead deferred to a future date, typically involving an agreement or credit terms.

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