Combining Two Assets Having Perfectly Positively Correlated Returns Will Result

question 182

Multiple Choice

Combining two assets having perfectly positively correlated returns will result in the creation of a portfolio with an overall risk that ________.

• A) remains unchanged
• B) decreases to a level below that of either asset
• C) increases to a level above that of either asset
• D) lies between the asset with the higher risk and the asset with the lower risk