Which of the Following Statements Is(are)true Regarding the Variance of a Portfolio

question 25

Multiple Choice

Which of the following statements is(are) true regarding the variance of a portfolio of two risky securities?

• A) The higher the coefficient of correlation between securities,the greater the reduction in the portfolio variance.
• B) There is a linear relationship between the securities' coefficient of correlation and the portfolio variance.
• C) The degree to which the portfolio variance is reduced depends on the degree of correlation between securities.
• D) a and b.
• E) a and c.

---

Definitions:

Custom Folders

User-defined directories created to organize files and documents according to personalized criteria.

RSS Feed

A type of web feed allowing users to access updates to online content in a standardized, computer-readable format.

HTTP Portion

A segment of a URL that specifies the Hypertext Transfer Protocol used for transmitting data.

Appearance

The visual aspect of something how it looks, including its layout, color scheme, and design elements.