If Two Stocks Are Perfectly Negatively Correlated, a Portfolio with Equal

question 62

True/False

If two stocks are perfectly negatively correlated, a portfolio with equal weighting in each stock will always have a volatility (standard deviation) of 0.

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Definitions:

Primary Central Sleep Apnea

A sleep disorder characterized by pauses in breathing during sleep due to the brain's failure to signal the muscles to breathe.

Spinal Muscle Atrophy

A genetic disorder characterized by weakness and wasting (atrophy) in muscles used for movement due to loss of motor neurons in the spinal cord.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome, often a normal reaction to stress, but can also be a disorder when excessive.

Fazio-Londe Disease

A rare, inherited motor neuron disease that primarily affects children and young adults, leading to progressive muscle weakness.