When Returns Are Perfectly Positively Correlated,the Risk of the Portfolio

question 49

Multiple Choice

When returns are perfectly positively correlated,the risk of the portfolio is:

• A)zero
• B)the weighted average of the individual securities risk
• C)equal to the correlation coefficient between the securities
• D)infinite

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Definitions:

Median Section

a type of anatomical section that divides the body or an organ vertically into equal right and left halves.

Midbrain

A region of the brainstem playing a critical role in motor movement, particularly eye movements, and in auditory and visual processing.

Corpora Quadrigemina

A structure in the midbrain comprising four colliculi (two superior and two inferior) that are involved in visual and auditory processes.

Cerebral Aqueduct

A narrow channel located in the midbrain that connects the third and fourth ventricles of the brain, allowing the flow of cerebrospinal fluid.