Homework SourseThere is no reduced risk in a portfolio of securities when T
There is no reduced risk in a portfolio of securities when
The securities in the portfolio are positively correlated
The securities in the portfolio are perfectly positively correlated
The securities in the portfolio are negatively correlated
The securities in the portfolio are perfectly negatively correlated
Risk can never be reduced by holding securities in a porfolio
| a. | The securities in the portfolio are positively correlated | |
| b. | The securities in the portfolio are perfectly positively correlated | |
| c. | The securities in the portfolio are negatively correlated | |
| d. | The securities in the portfolio are perfectly negatively correlated | |
| e. | Risk can never be reduced by holding securities in a porfolio |
Solution
The securities in the portfolio are perfectly positively correlated
when the correlation is +1 there is no reduced risk
| The securities in the portfolio are perfectly positively correlated |
