The Biggest Reduction in Risk Would Be Achieved by Combining

question 42

Multiple Choice

The biggest reduction in risk would be achieved by combining two assets into a portfolio with a correlation coefficient equal to ____.

• A) −1.0
• B) −0.5
• C) 0
• D) 0.5
• E) 1.0

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Definitions:

Cultural Groups

Collections of people who share common values, beliefs, practices, and traditions, often defined by nationality, ethnicity, religion, or other unifying cultural elements.

Social Referencing

The tendency for individuals, especially infants and children, to look to others in their environment to obtain cues for how to react in certain situations.

Attachment Pattern

The systematic ways in which individuals emotionally bond and connect with others, particularly in the context of caregiver and child relationships.

Insecure Attachment

A type of emotional bond where an individual has difficulty forming secure, trusting connections with caregivers or partners.