When a New Stock Is Introduced into a Portfolio and the "Peaks

question 38

True/False

When a new stock is introduced into a portfolio and the "peaks" in its return occur with the "valleys" in the portfolio's return, the stock's return is said to be perfectly negatively correlated with the portfolio's, and its addition will reduce the portfolio's risk.

---

Definitions:

Chilly Climate

A term often used in educational and workplace contexts to describe an environment that is unwelcoming and marginalizes certain groups, making it harder for them to succeed.

Hidden Curriculum

The lessons, values, and perspectives that are not explicitly taught but are learned by students through their experiences and interactions in school.

Correspondence Principle

In sociology, the principle suggesting that the structure of educational systems reflects the structure of the labor market and the social class system.

Meritocracy

A system where success and advancement are based on individual ability and talent rather than on class privilege or wealth.