The Less Correlated the Securities in a Portfolio

question 23

Multiple Choice

The less correlated the securities in a portfolio,

• A)the lower the portfolio risk.
• B)the higher the portfolio risk.
• C)the lower the unsystematic risk.
• D)the higher the diversifiable risk.

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Definitions:

Exponent Laws

Definition: Rules governing the operations on powers, including product, quotient, power of a power, zero and negative exponents.

Simplify

By distilling something to its essential parts, this process aims to decrease complexity and enhance understanding.

Simplify

To simplify a mathematical expression or problem to its most basic form.

Like Terms

Algebraic terms that feature identical variables elevated to identical exponents and are capable of being merged.