Question: can someone help explain the theory behind this and why it is B. thank you! hich of the following is TRUE about diversification? a) By

can someone help explain the theory behind this and why it is B. thank you!

hich of the following is TRUE about diversification? a) By diversifying, portfolio risk can be reduced to zero. b) There is no benefit from diversification if the correlation coefficient is 1. o The variance is the weighted average of the individual securities' variances. o If the covariance between two securities is negative, then the portfolio's standare deviation can always be reduced to zero. ) A and D are both true

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Before reading this chapter or beginning class, what did you expect marketing to be? Ask a family member, classmate, or coworker what they think marketing is. See whether you can persuade them that...

a)What is diversification? How does diversification work? Can all risks be diversified? Please explain how diversification reduces portfolio risk? b)Describe, how diversification is achieved. Explain...

1. Risk of two securities with different expected return can be compared with: a) Coefficient of variation b) Standard deviation of securities c) Variance of Securities d) None of the above 2. A...

Section A. 1) Describe the various forms of economic integration in Europe. What is Brexit, and what are the implications for Great Britain's relationship with Europe in terms of global trade. 2)...

I need your help with this: Can you please quote from the attached chapters / resource if possible? Corporations often use different costs of capital for different operating divisions. Using an...

Northern Virginia Community College HOW MUCH FINANCIAL RISK SHOULD YOU TAKE? Mark D. D'Antonio Nova Southeastern University FORT LAUDERDALE, FLORIDA, U.S.A. Abstract A successful retirement...

Hello. I need to write a three page review for the two articles attached. Each review should include a brief summary that include the major points of the article, as well as a summary of my own...

please help me in 70 dollars to do this assignment iin APA style referencing Topic 1 & 2 Introduction to financial management and the Australian Taxation system Financial Markets 2 Learning...

please help me. I can pay only 70 dollars in this assignment Topic 1 & 2 Introduction to financial management and the Australian Taxation system Financial Markets 2 Learning Objectives Describe what...

I have completed the answers on the attached but would like to check them. Can you review he attachment and complete so I can double check my answers. I am worried about my responses on 40-51 the...

Hi. I need help with my FIN 402 work. You guys really help me out. Case Problem 4.1 Coates's Decision On January 1, 2017, Dave Coates, a 23-year-old mathematics teacher at Xavier High School,...

An ionic compound X is only slightly soluble in water. What test would you employ to show that the compound does indeed dissolve in water to a certain extent?

In Brazil, a country that underwent a rapid inflation before 1994, many transactions were conducted in dollars rather than in reals, the domestic currency. Why?

Which type of bond is the safest? Municipal bond Corporate bond U . S . government bond Yankee bond

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".