The Biggest Reduction in Risk Would Be Achieved by Combining

question 42

Multiple Choice

The biggest reduction in risk would be achieved by combining two assets into a portfolio with a correlation coefficient equal to ____.

• A) −1.0
• B) −0.5
• C) 0
• D) 0.5
• E) 1.0

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Definitions:

Action

The process of doing something in order to achieve a specific goal or result.

Stages of Change

A concept in psychology that maps out the phases individuals go through as they modify behavior, ranging from precontemplation to maintenance.

Transtheoretical Model

A theory of behavior change that assesses an individual's readiness to act on a new healthier behavior, and provides strategies, or processes of change to guide the individual.

Motivational Interviewing

A counseling approach that helps to inspire change by exploring and resolving ambivalence.