A portfolio manager is studying three securities, each of them has the same expected rate of return. The correlations of each security with the existing portfolio are as follows:

i) 0.50 for Security A; 

ii) - 0.50 for Security B; 

iii) 1.0 for Security C. 

Which security will lower the risk (variability) of the portfolio to the greatest degree?

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The security that will ... View the full answer