When You Compile a Portfolio of Stocks, You Should Avoid

question 30

Multiple Choice

When you compile a portfolio of stocks, you should avoid including stocks that exhibit

• A) a high negative correlation.
• B) a high positive correlation.
• C) no correlation.
• D) an inverse correlation.

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Definitions:

Personality Tests

are assessments designed to measure and evaluate individuals' characteristic patterns of behavior, thought, and emotion, often to identify personality traits.

Correlation Coefficient

A statistical measure that denotes the degree to which two variables are linearly related, ranging from -1 to +1.

Measures

Tools or techniques used to assess, quantify, or evaluate a particular process, trait, or ability.

Relationship

The way in which two or more concepts, objects, or people are connected, or the state of being connected.