QUESTION 5

1. If two assets with return correlation coefficients equal to one make up a portfolio, then the portfolio does not take advantage of any diversification benefits.

   True

   False

1 points

QUESTION 6

1. A nannying business could diversify by:

   offering services in different locations

   offering both long-term care and casual babysitting

   obtaining funding from different sources (for example, a bank loan and family)

   all of the above

   Which is an example of diversification?

   		Investing in different investment classes (for example, property and shares and cash)
   		Investing in companies from different industries
   		investing in companies from different parts of the world
   		all of the above

   1 points

   QUESTION 8

   Diversification is commonly explained with the phrase:

   "Don't put all your eggs in one basket"

   "Always invest everything you have into ONE single thing"

   "Investors require compensation (return) for holding a particular level of risk"

   "Don't put the cart before the horse"

   ......................

   A collection of investments held by a person or organisation is called:

   		lots of money
   		a portfolio
   		infinite possiblity
   		a bucket

   1 points

   QUESTION 10

   If you are building a portfolio, then you desire assets that have a correlation coefficient of one.

   True

   False

   please make sure that the answer correct.