A Portfolio of Two Securities That Are Perfectly Positively Correlated

question 54

Multiple Choice

A portfolio of two securities that are perfectly positively correlated has

• A) A standard deviation that is the weighted average of the individual securities standard deviations.
• B) An expected return that is the weighted average of the individual securities expected returns.
• C) No diversification benefit over holding either of the securities independently.
• D) Choices b and c
• E) All of the above.

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Definitions:

Brand Relationship

The connection and interaction between a brand and its customers, encompassing aspects like trust, loyalty, and engagement.

Friends

Individuals with whom one shares a bond of mutual affection, typically exclusive of family or sexual relationships.

Influencers

Individuals who have the power to affect the purchasing decisions of others due to their authority, knowledge, position, or relationship.

Brand Development

The process of creating and strengthening a brand's equity directly through advertising campaigns and indirect methods such as customer experience management.