Question: If the correlation between two stocks is +1, then a portfolio combining these two stocks will have a variance that is: less than the weighted

If the correlation between two stocks is +1, then a portfolio

If the correlation between two stocks is +1, then a portfolio combining these two stocks will have a variance that is: less than the weighted average of the two individual variances. equal to the weighted average of the two individual variances. None of these. greater than the weighted average of the two individual variances. less than or equal to average variance of the two weighted variances, depending on other information

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!

If the correlation between two stocks is +1, then a portfolio combining these two stocks will have a standard deviation that is: a. less than the weighted average of the two individual standard...

1) ABC Corp. is planning to use a piece of land that they currently own for an expansion project. They had paid $1,000,000 in 2000 to buy the land. Based on its current market value, ABC can collect...

If the correlation between two stocks is 0.8, then a portfolio combining these two stocks in equal proportions will have a variance that is? Group of answer choices a. less than the weighted average...

If the correlation between two stocks is 0.4, then a portfolio combining these two stocks in equal proportions will have a variance that is? O equal to the weighted average of the two individual...

If the correlation between two stocks is 0.2, then a portfolio combining these two stocks in equal proportions will have a variance that is? a. equal to the weighted average of the two individual...

If the correlation between two stocks is 0.2, then a portfolio combining these two stocks in equal proportions will have a variance that is?? a.equal to the weighted average of the two individual...

Please explain. Thank you in advance Which of the following is true? i) If the correlation between two assets is +1, then a portfolio combining these two assets will have a standard deviation that is...

6. Which of the following is true? i) If the correlation between two assets is +1, then a portfolio combining these two assets will have a standard deviation that is greater than the weighted average...

4. Which of the following is true? i) If the correlation between two assets is +1, then a portfolio combining these two assets will have a standard deviation that is greater than the weighted average...

Question 21 1 pts Six months ago, you purchased 100 shares of stock in ABC Co. at a price of $43.89 a share. ABC stock pays a quarterly dividend of $.10 a share. Today, you sold all your shares for...

Introduce a business model for remote work that could be adopted by an organization in any industry. Include the benefits and challenges of remote work and some short and long-term communication...

Consider a 12-bit fixed-point real number in 6.6 format. What is the largest positive value in binary? What is the largest negative value in binary? What is the smallest (nonzero) positive value in...

Evaluate the integral - 0 . 6 9 0 . 6 9 ( e - x 2 - ( e x 2 - 1 ) ) dx

9. (15 points) A company is considering a new project that requires an investment of \$5 million. The project is expected to generate cash flows of $2 million in year 1,$3 million in year 2, and $4...

Identify three ways to manage an intergenerational workforce.

Prepare a Porters Five Forces analysis.

Analyze the impact of mergers and acquisitions on employees.