Multiple Choice
Assume Danny is considering combining two investments to form a portfolio, and he is very concerned with the risk that will result from the combination. If he wants to attain the greatest effect from diversification, he would prefer that the assets _____.
A) are negatively related
B) are positively related
C) are not related at all
D) have a negative coefficient of variation
E) have a positive coefficient of variation
Correct Answer:
Verified
Correct Answer:
Verified
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