Use the Table for the Question(s) Below

question 14

Essay

Use the table for the question(s) below.
Consider the following expected returns, volatilities, and correlations:

-What diversification, if any, is achieved if two stocks in a portfolio are perfectly positively correlated?

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Definitions:

Scleroderma

A group of autoimmune diseases that cause the skin and connective tissues to harden and tighten.

Melanocytes

Cells located in the basal layer of the epidermis that produce melanin, the pigment responsible for skin color.

Hematocrit

A measurement of the proportion of blood that is made up of red blood cells, usually expressed as a percentage.

Hyperpigmentation

A condition where patches of skin become darker in color than the surrounding skin, due to excess melanin.