Question: You know COV(A,B) = 100% 2 . You also know thatr AB = 0.5 ands B = 10%. Finally, you know that the systematic compontent

You know COV(A,B) = 100%². You also know thatr_AB = 0.5 ands_B = 10%. Finally, you know that the systematic compontent of asset A's risk, measured by standard deviation, is 20%. Knowing these things what can we say with certainty?

16. You know COV(A,B) = 100%. You also know that PAB = 0.5 and Gg = 10%. Finally, you know that the systematic component of asset A's risk, measured by standard deviation, is 20%. Knowing these things what can we say with certainty? A) Asset A is a less efficient asset than B B) Asset A is a more efficient asset than B C) Asset A is fully diversified D) Asset B is a perfect hedge to asset A E) A mixture of asset A and B could be found that would create the risk-free asset

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