In General, the Lower (Less Positive and More Negative) the Correlation

question 46

Multiple Choice

In general, the lower (less positive and more negative) the correlation between asset returns,

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

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Definitions:

Nuclei

Nuclei are membrane-bound organelles found in eukaryotic cells, containing most of the cell's genetic material and acting as the control center for cell growth, metabolism, and reproduction.

Skeletal

Relating to or consisting of the bones of the body or the skeleton.

Smooth

A type of involuntary muscle found in various organs, including the stomach, intestines, and blood vessels, controlling their movements and function.

Cardiac

Pertaining to the heart, its structure, function, or diseases.