The Global Minimum Variance Portfolio Formed from Two Risky Securities

question 40

Multiple Choice

The global minimum variance portfolio formed from two risky securities will be riskless when the correlation coefficient between the two securities is

• A)0.0
• B)1.0
• C)0.5
• D)-1.0
• E)negative

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Definitions:

Bipolar Disorder

A mental disorder marked by significant mood swings including manic highs and depressive lows.

Manic-depressive

An outdated term for bipolar disorder, characterized by extreme mood swings from manic highs to depressive lows.

Hallucinations

Perceptions or sensory experiences that occur without an external stimulus, often seen in various psychiatric conditions.

Delusions

Fixed false beliefs that are maintained despite strong evidence to the contrary, often seen in psychiatric conditions.