Solved

In Order to Benefit from Diversification, the Returns on Assets

Question 83

Multiple Choice

In order to benefit from diversification, the returns on assets in a portfolio must:


A) Be perfectly positively correlated
B) Be perfectly negatively correlated
C) Not be perfectly positively correlated
D) Have the same idiosyncratic risks

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q31: Briefly explain the difference between idiosyncratic risk

Q78: We observe an increase in the price

Q79: Diversification can eliminate:<br>A)All risk in a portfolio<br>B)Risk

Q80: Uncertainty associated with the expected rate of

Q82: Leverage:<br>A)Reduces risk<br>B)Is synonymous with risk-free investment<br>C)Increases expected

Q84: Sometimes spreading has an advantage over hedging

Q85: High oil prices tend to harm the

Q86: Discuss how well financial markets would work

Q87: Spreading involves:<br>A)Finding assets whose returns are perfectly

Q107: An investment pays $1,200 a quarter of