A Portfolio Combining Two Assets Whose Returns Are Less Than

question 136

True/False

A portfolio combining two assets whose returns are less than perfectly positive correlated can increase total risk to a level above that of either of the components.

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Definitions:

Locus of Control

A psychological concept that describes the degree to which individuals believe that they have control over the outcome of events in their lives.

Psychosocial Function

Aspects of psychological and social activities or behaviors that influence an individual's well-being and social integration.

Mentoring Relationship

A dynamic where an experienced individual (mentor) provides guidance, knowledge, and support to a less experienced person (mentee).

Psychosocial Function

Pertains to an individual's psychological development in, and interaction with, a social environment.