In General, Which Stocks Should Be Combined into a Portfolio

question 73

Multiple Choice

In general, which stocks should be combined into a portfolio if the goal is the greatest reduction possible in overall portfolio risk?

• A) Stocks with returns that are positively correlated
• B) Stocks with returns that are negatively correlated
• C) Stocks with returns that are not correlated
• D)Stocks that have the highest expected returns

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Definitions:

Natural Environment

All living and non-living things occurring naturally on Earth, including landscapes, vegetation, climates, and natural resources.

Biological Constraints

Limitations inherent in organisms that make certain behaviors, learning, or adaptations more difficult to achieve despite environmental influences.

Train Dog

is the process of teaching a dog to perform specific behaviors or to adhere to certain rules, often involving techniques of reinforcement and behavior modification.

Cognitive Maps

Mental representations of the physical layout of the environment, enabling an individual to navigate and understand spatial information.