A Portfolio of Two Negatively Correlated Assets May Have Less

question 48

True/False

A portfolio of two negatively correlated assets may have less risk than either of the individual assets.

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Definitions:

Premises

Statements or assumptions that are used as the basis for a conclusion within an argument.

Unwarranted Assumptions

Assumptions made without sufficient evidence, often leading to flawed reasoning or conclusions.

Modus Ponens

a logical argument form and principle of inference where if a conditional statement ("if P, then Q") is accepted, and the antecedent (P) holds, then the consequent (Q) can be concluded.