Combining Two Assets Having Perfectly Negatively Correlated Returns Will Result

question 51

Multiple Choice

Combining two assets having perfectly negatively correlated returns will result in the creation of a portfolio with an overall risk that ________.

• A) remains unchanged
• B) decreases to a level below that of either asset
• C) increases to a level above that of either asset
• D) stabilizes to a level between the asset with the higher risk and the asset with the lower risk

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