Multiple Choice
If the returns of two assets are perfectly positively correlated, an investor who puts half of his/her savings into each will:
A) reduce risk.
B) have a higher expected return.
C) not gain from diversification.
D) reduce risk but lower the expected return.
Correct Answer:

Verified
Correct Answer:
Verified
Q45: When considering different investments, a risk-averse investor
Q46: In order to benefit from diversification, the
Q47: Given a choice between two investments with
Q48: Up to what amount would a risk-neutral
Q49: Consider the following two assets with probability
Q51: An investor practicing hedging would be most
Q52: A $500 investment has the following payoff
Q53: Professional gamblers know that the odds are
Q54: Explain why returns on assets compensate for
Q55: Systematic risk:<br>A) is the risk eliminated through