Some Diversification Benefits Can Be Achieved by Combining Securities in a Portfolio

question 72

Multiple Choice

Some diversification benefits can be achieved by combining securities in a portfolio as long as the correlation between the securities is ________.

• A) 1
• B) less than 1
• C) between 0 and 1
• D) less than or equal to 0

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Definitions:

Productive

Refers to the ability of an entity, be it an individual or an organization, to produce a significant amount or output from a certain amount of inputs.

Training

The process of enhancing the skills, capabilities, and knowledge of employees for the purpose of improving their job performance.

Managers

Individuals responsible for controlling or administering an organization or group of staff.

Marginal Revenue Product

The extra revenue generated by employing one more unit of a factor, such as labor or capital, holding other factors constant.