Combining Negatively Correlated Assets Having the Same Expected Return Results

question 150

Multiple Choice

Combining negatively correlated assets having the same expected return results in a portfolio with ________ level of expected return and ________ level of risk.

• A) a higher; a lower
• B) the same; a higher
• C) the same; a lower
• D) a lower; a higher

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Definitions:

Hypothesis

A suggested explanation for an observed occurrence, offered as a foundation for additional exploration.

Generalization

The process of applying findings from a sample to a larger population, assuming the sample is representative.

Validation

The process of verifying that a product, service, or system meets requirements and specifications and fulfills its intended purpose.

Control

In experimental research, the process of holding factors constant to isolate the effect of the independent variable on the dependent variable.