Investing in Two Assets with a Correlation Coefficient of 1

question 14

Multiple Choice

Investing in two assets with a correlation coefficient of 1.0 will reduce which kind of risk?

• A) Market risk
• B) Unique risk
• C) Unsystematic risk
• D) With a correlation of 1.0, no risk will be reduced

Understand the characteristics of the American economic system and identify it as modified capitalism.

Comprehend the relationship between ethical conduct, corporate social responsibility, and business profitability.

Analyze government measures to counteract economic contraction and expansion.

Describe the evolution of the American economy through various phases including the marketing economy phase.

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Definitions:

Social Loafing

The tendency of individuals to reduce their effort when working in a group, compared to when they are working alone.

Target Completion Date

The specifically designated day by which a task or project is expected to be finished.

Diverse Demography

Refers to the presence of a wide range of differences among a population's members, including age, race, gender, ethnicity, and so on.

Homogeneous Teams

Groups whose members have similar backgrounds, skills, experiences, and perspectives, which can foster unity but limit diversity and creativity.