When Returns Are Perfectly Positively Correlated,the Risk of the Portfolio

question 49

Multiple Choice

When returns are perfectly positively correlated,the risk of the portfolio is:

• A)zero
• B)the weighted average of the individual securities risk
• C)equal to the correlation coefficient between the securities
• D)infinite

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Definitions:

Supplier Evaluation Process

A systematic approach to appraising and scoring suppliers based on their performance, reliability, quality, and capability to meet requirements.

Evaluation Criteria

The standards or benchmarks used to assess the quality, performance, or suitability of a product, service, or supplier.

Unilateral Price Increase

A decision made by one party, usually the seller, to raise prices without the agreement or negotiation with the buyer.

Crunch

A critical situation or period characterized by a shortage or pressured demand for certain resources, often leading to difficult decision-making.