Which one of the following correlation relationships has the lowest risk reduction potential? A. perfectly positive ...
Which one of the following correlation relationships has the lowest risk reduction potential?
A. perfectly positive
B. positive
C. negative
D. perfectly negative
E. uncorrelated
Homework Answers
Answer - D. perfectly negative
In a portfolio, when the securities within the portfolio have lowest correlation, risk in the portfolio would be minimal.
A correlation coefficient can be between +1 to -1. '-1' is the lowest correlation positive which implies a perfect negative correlation.
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Which one of the following correlation relationships has the
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