A Portfolio That Combines Two Assets Having Perfectly Positively Correlated

question 104

True/False

A portfolio that combines two assets having perfectly positively correlated returns can not reduce the portfolio's overall risk below the risk of the least risky asset.

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Definitions:

Color-blindness

A deficiency in the way someone sees color, making it difficult to distinguish between certain colors.

Dominant

In genetics, a term to describe the ability of an allele for a trait to mask the presence of another allele.

Allele

A variation of a gene, resulting from mutation, that occurs in the same location on a chromosome, among two or more possibilities.

Blood Protein

Various proteins found in blood, serving functions such as transport, immunity, and regulation of bodily processes.