Which One of the Following Statements Is True Regarding the Variance

question 27

Multiple Choice

Which one of the following statements is true regarding the variance of risky portfolios?

• A) the higher the correlation coefficient between securities, the greater will be the reduction in the portfolio variance
• B) there is a direct relationship between the securities correlation coefficient and the portfolio variance
• C) the degree to which the portfolio variance is reduced depends on the degree of correlation between securities
• D) proper diversification can reduce or eliminate all of a portfolio's risk

Identify the role of external trigger signals in counter operation.

Differentiate between retentive and non-retentive counter behavior.

Understand the cultural and symbolic significances of traditional African art pieces.

Identify the functions and purposes of various African art forms within societal contexts.

---

Definitions:

Positive Externality

A beneficial effect experienced by a third party who did not choose to incur that benefit, often resulting from an individual's or firm's actions.

Corrective Tax

A tax designed to internalize externalities, effectively correcting market outcomes that might otherwise result in social inefficiency.

Command-And-Control Policies

Regulatory strategies where the government sets specific limits and controls on emissions or discharges, often requiring technology or methods to be used.

Corrective Taxes

Taxes imposed to correct the market outcomes by accounting for externalities and bringing the social costs and benefits into balance.