Multiple Choice
Carl plans to add one of two alternative stocks to his portfolio. Stock A has a correlation of 0.70 with his portfolio and Stock B has a correlation of 0.10. Both stocks have the same standard deviation of returns. Based on this information, relative to Stock A, Stock B will result in:
A) more total risk and less active risk for the portfolio.
B) less total risk and more active risk for the portfolio.
C) more total risk and more active risk for the portfolio.
D) less total risk and less active risk for the portfolio.
Correct Answer:
Verified
Correct Answer:
Verified
Q65: The coefficient of determination, also known as
Q66: The time-weighted rate of return is affected
Q67: Identify the three approaches to calculating value
Q68: Which of the following measures uses the
Q69: The money-weighted rate of return is equivalent
Q71: * Use the following information to
Q72: Which method of calculating VaR is the
Q73: Which measure calculates performance relative to a
Q74: Superior portfolio performance can result from:<br>A) the
Q75: The reward-to-variability ratio (Sharpe ratio) measures:<br>A) return