Multiple Choice
The correlation between Stock A and Stock B is 0.40. The correlation between Stock A and Stock C is 0.20, and the correlation between Stock B and Stock C is 0.25. All else the same, which of the following portfolios will have the least risk?
A) All invested in Stock A
B) All invested in Stock C.
C) Equally invested in Stock A and Stock B.
D) Equally invested in Stock B and Stock C.
E) Equally invested in Stock A and Stock C.
Correct Answer:
Verified
Correct Answer:
Verified
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