Which of the Following Statement(s) Is(are) True Regarding the Variance

question 78

Multiple Choice

Which of the following statement(s) is(are) true regarding the variance of a portfolio of two risky securities?I) The higher the coefficient of correlation between securities, the greater the reduction in the portfolio variance.II) There is a linear relationship between the securities' coefficient of correlation and the portfolio variance.III) The degree to which the portfolio variance is reduced depends on the degree of correlation between securities.

• A) I only
• B) II only
• C) III only
• D) I and II
• E) I and III

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Definitions:

Large-brained Mammals

Large-brained mammals are animals within the mammalian class that have relatively large brain sizes, often associated with higher levels of intelligence, complex social structures, and adaptability.

Brain Size

Brain size refers to the physical dimensions or volume of the brain, which varies significantly among species and can be connected to cognitive abilities and neurological functions in a complex manner.

Elephants

Large mammals known for their distinctive long trunks, large ears, and social complexity, found in Africa and Asia and considered to be highly intelligent.

Dolphins

Aquatic mammals known for their high intelligence, social complexity, and ability to communicate through a variety of sounds.