In a Two-Stock Portfolio, Stocks with a Correlation Coefficient of __________

question 11

Multiple Choice

In a two-stock portfolio, stocks with a correlation coefficient of __________ will results in a smallest possible standard deviation for the portfolio.

• A) - 1
• B) - 0.5
• C) 0
• D) + 0.5
• E) + 1

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Definitions:

Accounting Cycle

The sequence of procedures performed in accounting to process, record, and report financial transactions over a specific period.

Adjusted Trial Balance

An adjusted trial balance is a list of all the accounts of a company, including any adjustments, showing the final balances to be used for financial statements.

Financial Reports

Documents that provide an overview of a business's financial condition in both short and long term.

Asset

Any resource owned by a business or an individual that is expected to provide future benefits.