When Adding a Randomly Chosen New Stock to an Existing

question 57

True/False

When adding a randomly chosen new stock to an existing portfolio, the higher (or more positive)the degree of correlation between the new stock and stocks already in the portfolio, the less the additional stock will reduce the portfolio's risk.

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Definitions:

Strategic Considerations

The thoughtful planning and analysis focused on long-term business or military objectives, taking into account the competitive environment and potential actions of other parties.

Predatory Pricing

Selling a product or service at a very low price with the intention of driving competitors out of the market or creating barriers to entry for potential new competitors.

Tying

A sales practice where one product is sold or leased only on the condition of buying another product or agreeing to terms that are not initially disclosed.

Controversial

Causing debate or disagreement, often due to differing opinions or values.