The Covariance Between Two Investments of a Portfolio Is Equal

question 121

True/False

The covariance between two investments of a portfolio is equal to the sum of the variances of the investments.

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Definitions:

Presentment

The formal presentation of a financial instrument, such as a check, for payment.

Bankruptcy

A legal proceeding involving a person or business that is unable to repay their outstanding debts, leading to the disposition of assets to pay creditors.

Primary Liability

The obligation to pay a debt or fulfill a contractual obligation first, before any secondary parties are called upon.

Indorsers

Individuals who sign their names on the back of negotiable instruments, like checks or promissory notes, transferring their rights to another party.