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:

Diffusion

The passive movement of molecules from an area of higher concentration to an area of lower concentration until equilibrium is reached.

Alveolus

An air sac of the lung through which gas exchange with the blood takes place. Saclike unit of some glands (e.g., mammary glands). One of several flattened vesicles located just inside the plasma membrane in alveolate protists.

Partial Pressure

The pressure exerted by a singular type of gas in a mixture of gases.

Pulmonary Surfactant

A complex mixture of lipids and proteins secreted by cells in the lungs that reduces surface tension, preventing the collapse of alveoli during exhalation.