A Portfolio Manager Is Considering Adding Another Security to His

question 73

Multiple Choice

A portfolio manager is considering adding another security to his portfolio. The correlations of the five alternatives available are listed below. Which security would enable the highest level of risk diversification?

• A) 0.0
• B) 0.25
• C) -0.25
• D) -0.75
• E) 1.0

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Definitions:

Implanted Memories

False memories that are deliberately or accidentally suggested and then incorporated into an individual's memory bank.

False Memory

A psychological phenomenon where a person recalls something that did not actually occur or recalls it differently from the way it actually happened.

Childhood Sexual Abuse

Involves the sexual exploitation or coercion of a child, often resulting in significant psychological and emotional trauma.

Anterograde Amnesia

is a condition where an individual is unable to form new memories following an event that caused the amnesia, despite retaining memories from before the event.