If two investments are perfectly positively correlated:
A. there is no benefit from diversification.
B. bets are perfectly hedged and risks are canceled out.
C. diversification reduces risk without changing the expected payoff.
D. diversification reduces both risk and the expected payoff.
A. there is no benefit from diversification.
You might also like to view...
U.S. households headed by ________ are the most likely to be poor.
A. Hispanic males B. single males C. those under age 18 D. single women
In which antitrust case did the Supreme Court begin to apply the per se rule to determine whether a firm was in violation of the Sherman Antitrust Act?
A. The Standard Oil case. B. The Alcoa case. C. The IBM case. D. The MIT case.
Total income is defined as
A. the total receipts of firms before taxes. B. the sum of the total receipts of firms and the amount earned by households. C. the total amount earned by all resource owners. D. the sum of the total receipts of firms less the amount of tax that must be paid.
Price discrimination occurs when a firm sells
A. a given product at different prices to different ethnic groups. B. a given product at different prices when it is produced in different colors. C. a given product at different prices unrelated to differences in cost. D. a given product at different prices at different points in time.