Describe the Diversification Potential of Two Assets with a -0

question 79

Essay

Describe the diversification potential of two assets with a -0.7 correlation.What is the potential if the correlation is +0.7?

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Definitions:

Halo Effect

A cognitive bias where an individual's overall impression of a person influences how they feel and think about that person's character.

Phi Phenomenon

A perceptual illusion in which stationary objects shown in rapid succession, such as lights flashing at certain speeds, appear to be moving.

Recency Effect

Recency effect is a memory phenomenon where individuals are more likely to recall the last items in a series better than those in the middle or the beginning.

Student Performance

The outcomes or achievements of students, usually measured through grades, test scores, or other forms of assessment.