Lower (Less Positive and More Negative) the Correlation Between Asset

question 127

Multiple Choice

Lower (less positive and more negative) the correlation between asset returns, ________.

• A) lesser the potential diversification of risk
• B) greater the potential diversification of risk
• C) lower the potential profit
• D) lesser the assets have to be monitored

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Definitions:

Differential Prices

Pricing strategies that involve selling the same product or service at different prices to different market segments or in different contexts.

Price Discrimination

A pricing strategy where a company sells the same product to different customers at different prices based on market factors.

Firm Charges

Fees or charges that a company puts in place for its services or products, often structured around cost-recovery or profit-making objectives.

Two-Part Tariffs

A pricing strategy where the cost to a customer consists of a fixed fee plus a variable charge based on usage or quantity purchased.