Multiple Choice
If two events are positively correlated but not perfectly correlated,then
A) diversification is not necessary since there is no risk.
B) diversification eliminates all risk.
C) diversification does not reduce risk at all.
D) diversification can reduce risk.
Correct Answer:

Verified
Correct Answer:
Verified
Q2: A lottery game pays $500 with .001
Q4: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB6808/.jpg" alt=" -The above figure
Q23: A risk-preferring person is willing to pay<br>A)
Q29: A risk-neutral person will invest in a
Q46: Expected value represents<br>A) the actual payment one
Q52: Rahul has a concave utility function. Therefore,
Q65: Fair insurance<br>A)has an expected value for the
Q67: On any given day,a salesman can earn
Q83: One aspect of prospect theory is that
Q107: Someone who is risk-averse has<br>A)diminishing marginal utility