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If Two Stocks Are Perfectly Negatively Correlated, a Portfolio with Equal

question 62

True/False

If two stocks are perfectly negatively correlated, a portfolio with equal weighting in each stock will always have a volatility (standard deviation) of 0.


Definitions:

Gut Feelings

Intuitive judgments and responses that are not the result of conscious reasoning.

Leipzig, Germany

A city in the federal state of Saxony, Germany, known for its rich cultural heritage, including music, art, and its role in the history of philosophy and psychology.

Phrenology

A now-discredited theory that suggested the shape and size of the human skull could determine personality traits and mental abilities.

Pseudoscience

Claims, beliefs, or practices presented as scientific but lacking empirical evidence or scientific method.

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