Multiple Choice
If General Auto and Crystal Auto have returns that are perfectly positively correlated, then adding Crystal Auto to a portfolio that already contains General Auto will
A) reduce the risk in the portfolio.
B) increase the risk in the portfolio.
C) neither increase nor decrease the risk in the portfolio.
D) reduce the risk in the portfolio only for risk-averse savers.
Correct Answer:
Verified
Correct Answer:
Verified
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