Combining Two Assets Having Perfectly Negatively Correlated Returns Will Result

Multiple Choice

Combining two assets having perfectly negatively correlated returns will result in the creation of a portfolio with an overall risk that ________.

A) remains unchanged
B) decreases to a level below that of either asset
C) increases to a level above that of either asset
D) stabilizes to a level between the asset with the higher risk and the asset with the lower risk