Combining Two Negatively Correlated Assets to Reduce Risk Is Known

question 73

Multiple Choice

Combining two negatively correlated assets to reduce risk is known as

• A) diversification.
• B) valuation.
• C) liquidation.
• D) risk aversion.

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Definitions:

Acceleration

A provision in a contract that allows a lender to demand immediate payment of the entire outstanding balance if certain conditions are not met.

Payment

The transfer of money or its equivalent in exchange for goods, services, or to settle a debt.

Time Certain

A specific point in time agreed upon at which an event must occur or a condition must be met.

Electronic Format

A form of data storage or presentation that uses digital technology, often allowing for easy sharing and manipulation of information.