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:

Net Proceeds

The amount of money received from a transaction after all costs and expenses have been paid.

Commission

A fee paid for services, usually a percentage of the total transaction, often used as a compensation method in sales and services industries.

Merchandise

Goods or products that are bought and sold in business.

Commission

A fee paid for services, usually a percentage of the total cost, to an agent or employee for facilitating a sale or other transaction.