Other Things Equal, Diversification Is Most Effective When

question 65

Multiple Choice

Other things equal, diversification is most effective when

• A) securities' returns are uncorrelated.
• B) securities' returns are positively correlated.
• C) securities' returns are high.
• D) securities' returns are negatively correlated.
• E) securities' returns are positively correlated and high.

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Definitions:

Outline

A general description or plan showing the essential features of something but not the detail.

Plaintiff's Allegations

Claims made by the plaintiff in a lawsuit, detailing what the defendant did or failed to do that caused harm.

Active-Voice Sentence

A sentence structure where the subject performs the action stated by the verb, making the writing clearer and more engaging.

Plaintiff Filed

The initiation of a legal action in court by an individual or entity claiming to have incurred loss or injury by another.