Standard deviation of security portfolios

Reference no: EM13826036

Problem:

What relationship between 2 assets would we want to have if we wish to reduce the standard deviation of a 2 security portfolio?

A. A perfect positive correlation (corr = 1.0)

B. A perfect negative correlation (corr = -1.0)

C. Zero correlation (corr = 0.0)

D. Correlation does not affect risk in a portfolio sense.

Additional Information:

This question is basically belongs to the Finance as well as it is about the relationship between 2 assets when we reduce standard deviation of 2 security portfolios.

Reference no: EM13826036

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