If the Returns for Two Assets Have a Correlation Coefficient

question 71

True/False

If the returns for two assets have a correlation coefficient of one, then there are no benefits of diversification by combining these assets in a two-asset portfolio.

---

Definitions:

Transactional Function

The transactional function refers to the activities involved in the buying and selling process or exchange of goods and services between parties.

Selling Goods

The act of transferring ownership of products from a seller to a buyer for a price, typically conducted in the marketplace.

Taking Possession

The act of acquiring ownership or control over an asset, property, or item.

Distribution Channel

A chain of businesses or intermediaries through which a good or service passes until it reaches the end customer.