When Plotting the Risk/return Relationships for Possible Portfolios of Two

question 15

Multiple Choice

When plotting the risk/return relationships for possible portfolios of two securities, the lowest standard deviation of the portfolio possibilities would occur if the correlation coefficient were

• A) 0.
• B) -1.
• C) .5.
• D) 1.

Understand the calculation and reporting of noncontrolling interests in consolidated financial statements.

Identify and calculate goodwill in business combinations.

Apply the equity method of accounting for investments in associates and joint ventures.

Understand the impact of treasury stock transactions on earnings per share and owners' equity.

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Definitions:

Sedimentary Sequence

A chronological order of sedimentary rocks laid down in layers, reflecting the history of sediment deposition over time.

Shale

A type of fine-grained sedimentary rock that splits into thin layers, formed from mud composed of clay and other minerals.

Sandstone

A clastic sedimentary rock composed mainly of sand-sized mineral particles or rock fragments.

Rounded Pebbles

Smooth, round stones typically formed by the prolonged action of water or other forms of erosion and weathering on rocks.