When Combining Many Assets into a Portfolio the Correlation Between

question 68

Multiple Choice

When combining many assets into a portfolio the correlation between the variables has a(n) ____ impact on the overall risk of the portfolio than the overall risk of each asset.

• A) larger
• B) equal
• C) smaller
• D) none of the above

---

Definitions:

Experimental Games

Structured tasks designed to simulate decision-making scenarios in order to study human behavior and social interactions within controlled environments.

Cross-Cultural Replication

The process of conducting research studies in different cultural settings with the aim of verifying whether findings are consistent across cultures.

Big Five Traits

A model identifying five broad dimensions of personality—Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism—used to describe human personality comprehensively.

Negative Emotions

Feelings that are generally considered to be unpleasant and harmful, such as sadness, anger, fear, and jealousy, often leading to negative outcomes or behaviors.