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The Greater the Negative Correlation Between Two (Or More) Securities

question 56

True/False

The greater the negative correlation between two (or more) securities, the lower the portfolio standard deviation (all else being equal).


Definitions:

Preferential Looking

A research methodology based on the observation that infants will look longer at more interesting or complex visual stimuli, used to assess vision and cognitive processing.

Accommodation

In cognitive development, the process by which an individual modifies existing cognitive schemas, perceptions, and understandings to make new information fit.

Habituation

The gradual decline in the intensity, frequency, or duration of a response when repeatedly exposed to a stimulus; indicates learning.

Sensory Memory

The shortest-term element of memory, which is the ability to retain impressions of sensory information after the original stimuli have ended.

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