Owning Two Securities Instead of One Will Not Reduce the Risk

question 40

Multiple Choice

Owning two securities instead of one will not reduce the risk taken by an investor if the two securities are

• A)perfectly positively correlated with each other
• B)perfectly independent of each other
• C)perfectly negatively correlated with each other
• D)of the same category,
• E)g.blue chips

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Definitions:

Economic Role

The function or position that an entity (such as an individual, firm, or government) plays within the larger economic system.

Personal Income Tax

A tax levied on individuals' earned income, including wages, salaries, and other earnings, differentiated by factors such as level of income, marital status, and others.

Federal Government Revenue

Federal government revenue consists of the money received by a government from taxes and non-tax sources to finance government activities.

Social Security Taxes

Social Security Taxes are taxes collected from employees and employers to fund the Social Security program, which provides retirement, disability, and survivor benefits.