Consider the Following Correlation Coefficient for Stocks M, N, P

Multiple Choice

Consider the following correlation coefficient for stocks M, N, P and Q. Which portfolio will have the least diversification benefit? $$\begin{array} { | l | r | r | r | r | } \hline & \text { Stock M } & \text { Stock N } & \text { Stock P } & \text { Stock Q } \\\hline \text { Stock M } & 1.000 & & & \\\hline \text { Stock N } & 0.911 & 1.000 & & \\\hline \text { Stock P } & 0.543 & - 0.123 & 1.000 & \\\hline \text { Stock Q } & - 0.321 & 0.411 & 0.000 & 1.000 \\\hline\end{array}$$

A) M and N
B) N and P
C) P and Q
D) M and P
E) N and Q