Assume that you have a choice of two assets, A and B, and a portfolio of an

Question:

Assume that you have a choice of two assets, A and B, and a of an equal share of the two assets. Assume also that the assets have the following statistics:

a. What does the negative covariance between the assets A and B mean?
b. As a risk-averse investor, would you choose the asset A, B, or the portfolio? Explain your reason.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...