Which of the following statements is correct? Select one: a. Assuming a correlation coefficient of 0 between two assets, the portfolio’s standard deviation will be lower than the weighted average of the individual assets’ standard deviation. b. Assuming a correlation coefficient of +1 between two assets, the portfolio’s standard deviation will be lower than the weighted average of the individual assets’ standard deviation.
Which of the following statements is correct? Select one: a. Assuming a correlation coefficient of 0 between two assets, the portfolio’s standard deviation will be lower than the weighted average of the individual assets’ standard deviation. b. Assuming a correlation coefficient of +1 between two assets, the portfolio’s standard deviation will be lower than the weighted average of the individual assets’ standard deviation.
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 1QTD
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Which of the following statements is correct?
Select one:
a.
Assuming a correlation coefficient of 0 between two assets, the portfolio’s standard deviation will be lower than the weighted average of the individual assets’ standard deviation.
b.
Assuming a correlation coefficient of +1 between two assets, the portfolio’s standard deviation will be lower than the weighted average of the individual assets’ standard deviation.
c.
Assuming a correlation coefficient of +1 between two assets, the portfolio’s standard deviation will be the same as the weighted average of the individual assets’ standard deviation.
d.
Both A and C.
Clear my choice
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