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Relationship Between Assets When Standard Deviation Of Security Portfolios Reduces

Question

What relationship between 2 assets would we want to have if we wish to reduce the standard deviation of a 2 security portfolio?

A. A perfect positive correlation (corr = 1.0)

B. A perfect negative correlation (corr = -1.0)

C. Zero correlation (corr = 0.0)

D. Correlation does not affect risk in a portfolio sense.

 

Summary

The question belongs to Finance and it is about the relationship between 2 assets when we reduce standard deviation of 2 security portfolios.

Total Word Count 24

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Comments

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