If Two Investments Are Uncorrelated

question 55

Multiple Choice

If two investments are uncorrelated:

• A) there is no benefit from diversification.
• B) there is no benefit to hedging.
• C) diversification reduces risk without changing the expected payoff.
• D) diversification reduces both risk and the expected payoff.

Calculate partnership return on equity and individual partner return on equity ratios.

Understand the liquidation process and final distribution in partnerships.

Understand the basics of modifying images in presentations.

Recognize the importance of saving work before printing or presenting.

---

Definitions:

Interpretation

The action of explaining the meaning of something or understanding it in a particular way.

Encoding

The initial process of converting information into a form that can be stored in memory, involving perceptual, cognitive, and emotional mechanisms.

Cataracts

A medical condition where the lens of the eye becomes progressively opaque, leading to vision impairment.

Bottom-up Processing

An approach to information processing that starts with the sensory input and builds up to the final perception.