If Two Assets with Correlation Coefficients of Less Than One

question 13

True/False

If two assets with correlation coefficients of less than one make up a portfolio, then the portfolio does not take advantage of any diversification benefits.

---

Definitions:

Sales On Account

Transactions where goods or services are sold and delivered, but payment is agreed to be made at a later date.

Internal Controls

Processes and procedures implemented by a business to safeguard its assets, enhance the reliability of its accounting records, ensure compliance with laws, and promote efficient operations.

Accounting System

A structured process of recording, summarizing, and analyzing an organization's financial transactions.

Chart of Accounts

A systematic list of all account titles and numbers being used by an organization to organize its financial transactions and prepare financial statements.