Combining Negatively Correlated Assets Having the Same Expected Return Results

question 150

Multiple Choice

Combining negatively correlated assets having the same expected return results in a portfolio with ________ level of expected return and ________ level of risk.

• A) a higher; a lower
• B) the same; a higher
• C) the same; a lower
• D) a lower; a higher

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Definitions:

Good Continuation

A principle in Gestalt psychology that states people tend to perceive connected lines or patterns as continuing in a smooth, uninterrupted manner.

Cochlear Implant

A medical device that bypasses damaged structures in the inner ear and directly stimulates the auditory nerve, allowing individuals with severe to profound hearing loss to perceive sound.

Auditory Nerve

The cranial nerve that transmits sound information from the cochlea of the inner ear to the brain, essential for hearing.

Basilar Membrane

A crucial structure in the cochlea of the inner ear, responsible for translating sound vibrations into neural signals by the movement of its hair cells.