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:

Merchandise Sold

Products that have been sold by a company, typically referring to goods rather than services.

Sales On Account

Transactions where goods or services are sold and delivered, but payment is agreed to be made at a later date.

Internal Controls

Processes and procedures implemented by a business to safeguard its assets, enhance the reliability of its accounting records, ensure compliance with laws, and promote efficient operations.

Accounting System

A structured process of recording, summarizing, and analyzing an organization's financial transactions.