Question: *********PLEASE ANSWER THIS QUESTION THOROUGHLY AND BRIEFLY********* Question 1 [9 points] True or false? If it is true, please justify why it is a true

*********PLEASE ANSWER THIS QUESTION THOROUGHLY AND BRIEFLY******************PLEASE ANSWER THIS QUESTION THOROUGHLY AND BRIEFLY********* Question 1 [9 points] True

Question 1 [9 points] True or false? If it is true, please justify why it is a true statement. If it is false, please explain exactly why it is false. [3 pts each; 1 pt for true/false answer, 2 pts for explanation] a. A portfolio comprises two stocks, A and B, with equal amounts of money invested in each. If the price of stock A increases and that of stock B decreases, the weight of stock A in the portfolio will increase. b. If two stocks' returns have a correlation coefficient that is positive, then there is no diversification effect when you combine them into a portfolio. c. When we form an equally weighted portfolio of stocks and keep increasing the number of stocks in the portfolio, the volatility of the portfolio also increases

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