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:

Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good to a change in its price, income level, or other factors.

Elasticity of Supply

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Shifting Resources

The reallocation of resources from one use to another, often in response to changing economic conditions or priorities.

Software Upgrade

The process of replacing a software version with a newer, often more improved or secure version.