Use the Table for the Question(s) Below

question 64

Multiple Choice

Use the table for the question(s) below.
Consider the following expected returns, volatilities, and correlations:

-Which of the following combinations of two stocks would give you the biggest reduction in risk?

• A) Duke Energy and Wal-Mart
• B) Wal-Mart and Microsoft
• C) Microsoft and Duke Energy
• D) No combination will reduce risk.

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