Even If the Correlation Between the Returns on Two Securities

question 34

True/False

Even if the correlation between the returns on two securities is +1.0, if the securities are combined in the correct proportions, the resulting 2-asset portfolio will have less risk than either security held alone.

---

Definitions:

Rough Projection

Refers to a bony projection with a rough surface, often serving as a site for muscle attachment.

Trochanter

A bony prominence on the femur near its joint with the hip bone, serving as an attachment for muscles or ligaments.

Bone Marking

Features on the surface of bones, such as ridges and bumps, which serve as attachments for muscles and ligaments.

Pointed Process

Refers to a sharp, protruding part of a bone, often serving as an attachment point for muscles or ligaments.