The Only Condition Under Which Risk Can Be Reduced to Zero

question 89

True/False

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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Definitions:

Flight-Or-Fight Response

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival, preparing the body to either confront or flee the situation.

Adaptive Benefits

Refers to the positive traits or behaviors that have evolved in an organism to enhance its survival and reproduction in its environment.

Positive Effects

Beneficial impacts or outcomes that contribute to well-being, happiness, or success.

Physical Exercise

Activities requiring physical effort carried out to sustain or improve health and fitness.