1. The minimum value of the correlation cocfficient is a) 1 b) 0 c) +1 d) there is no minimum value 2. The minimum value of covariance is a) 1 b) 0 c) +1 d) there is no minimum value 3. If two securities are negatively correlated, their covariance is a) positive b) negative c) zero d) cannot be determined 4. Assume the risk-free rate is constant over time. The correlation between the security x and the return on the risk-free asset is. a) negative b) positive c) zero d) cannot be determined without further information 5. The single most important investment decision is a) time horizon b) investment strategy c) asset allocation d) risk assessment 6. The work of Harry Markowitz is based on the search for a) efficient portfolios b) undervalued securities c) the highest long-term growth rates d) minimum risk portfolios 7. Portfolios do not exist. a) at the far right of the efficient frontier b) at the far left of the efficient frontier c) above the efficient frontier d) below the efficient frontier