Which of the Following Is Correct Regarding a Portfolio with Negatively

question 73

Multiple Choice

Which of the following is correct regarding a portfolio with negatively correlated assets?

• A)Combining two negatively correlated assets into a portfolio will not reduce portfolio risk.
• B)Combining two negatively correlated assets into a portfolio will reduce portfolio risk.
• C)Combining two negatively correlated assets into a portfolio will increase portfolio risk.
• D)Combining two negatively correlated assets into a portfolio will increase portfolio returns.

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Definitions:

National Conference

A large meeting for people from across the nation to discuss specific topics, share information, or make decisions related to a particular field or interest.

Consideration

Something of value exchanged between parties in a contract, making the agreement legally binding.

Lease Contracts

Legal agreements that grant one party the use of property, equipment, or assets owned by another party for a specified period in exchange for payment.

United Nations Convention

An international treaty or agreement formed under the auspices of the United Nations.