A Portfolio Will Always Have Less Risk Than the Riskiest

question 13

True/False

A portfolio will always have less risk than the riskiest asset in it if the correlation of assets is less than perfectly positive.

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Definitions:

FICA Tax

The Federal Insurance Contributions Act (FICA) tax is a U.S. federal payroll tax that funds Social Security and Medicare programs.

Social Security Tax

A payroll tax collected by governments to fund social security programs, typically a percentage of an employee's salary.

Medicare Tax

Medicare Tax is a federal payroll tax used to fund the Medicare program, which provides health insurance for eligible elderly and disabled individuals.

Social Security Tax

Social Security Tax is a tax levied on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits.