Question: Which multiple choice is correct? Asset Asseto FIGURE 85 Diversification Combining negatively correlated to reduce or diversity, risk Portfolio of Assets and Return Return Return
Which multiple choice is correct? Asset Asseto FIGURE 85 Diversification Combining negatively correlated to reduce or diversity, risk Portfolio of Assets and Return Return Return Time Time Time FIGURE 8.7 Risk Reduction Portfolio risk and diversification Diversifiable Risk Portfolio Risk, og Total Risk Nondiversifiable Risk 5 10 15 20 25 Number of Securities (Assets) in Portfolio From Figure 8.5 above, assets F and G have perfectly negative correlation From Figure 8.5 above, assets F and G have negative correlation From Figure 8.5 above, assets F and G have zero correlation. From Figure 8.7 above, a takeaway is one can maximize diversification benefit by having 25 assets in his/her portfolio
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