Increasing the Correlation Among Assets in a Portfolio Results in an Increase

question 113

True/False

Increasing the correlation among assets in a portfolio results in an increase in the standard deviation of the portfolio.

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Definitions:

Herpes Virus

A large family of viruses that can cause diseases in animals and humans, including cold sores and chickenpox.

Chicken Pox

A highly contagious viral disease, typically occurring in children, characterized by an itchy rash, fever, and fatigue, caused by the varicella-zoster virus.

Shingles

A viral infection causing a painful rash, usually appearing as a strip of blisters on one side of the body.

Autonomic System

The part of the nervous system that controls involuntary bodily functions, including heart rate, digestion, and respiratory rate.