Two assets have a correlation coefficient of minus−1.0. If you combine these two assets in a portfolio ________. Question content area bottom Part 1 A. the benefits of diversification are minimal B. the portfolio return will be 0% because the returns on one assets exactly offset the returns on the other asset C. there will be some combination of the two assets that produces a portfolio with no risk at all D. all combinations of the two assets will result in portfolios that are completely free of risk
Added by Steven T.
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A correlation coefficient of -1.0 indicates a perfect negative correlation between the two assets. This means that when one asset's return increases, the other asset's return decreases by a proportional amount. Show more…
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