If ABC Inc

question 19

Multiple Choice

If ABC Inc. and XYZ Inc. have returns that are perfectly positively correlated:

• A) adding XYZ Inc to a portfolio that consists of only ABC Inc. will reduce risk.
• B) adding ABC Inc to a portfolio that includes only XYZ Inc. will increase risk.
• C) adding XYZ Inc. to a portfolio that consists of only ABC Inc. will neither increase nor decrease the risk of the portfolio.
• D) adding XYZ Inc to a portfolio that consists of only ABC Inc. will neither increase nor decrease idiosyncratic risk but will lower systematic risk.

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Definitions:

Committee Considered

The phrase is typically used when a proposal or issue has been presented to a committee for review, deliberation, or decision-making.

Best

Describes the highest quality, greatest degree, or utmost excellence compared to all others in a category or group.

Correct Punctuation

The proper use of symbols such as commas, periods, and question marks in writing to clarify meaning.

Bestsellers List

A ranking of books or other media according to their sales figures within a specific period.