Portfolio diversification is ineffective when
A) assets in the portfolio have precisely the same pattern of returns.
B) assets in the portfolio have negative correlations.
C) assets in the portfolio are uncorrelated.
D) Portfolio diversification is ineffective in each of the above scenarios.
A
You might also like to view...
The reason only newly produced goods and services are counted in GDP is that ________
A) it is very difficult to impute a value to used goods B) most expenditures on used goods and services take place outside the market C) it does not help economists make better economic predictions because second-hand goods rarely have any residual value D) it allows economists to avoid double counting the production of goods and services E) none of the above
A fixed-weight price index uses a process that adjusts the weights continuously year by year
a. True b. False Indicate whether the statement is true or false
The distribution of income in developed countries is less egalitarian than less developed countries
a. True b. False Indicate whether the statement is true or false
When a good commodity is driven out of the market by a bad commodity, the result is called:
a. moral hazard. b. adverse selection. c. positive externality. d. negative externality. e. the commons problem.