Quiz Ch 08 – T/F Correlation Impact on Portfolio Risk Reduction

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: Incorporating a randomly selected new stock into an existing portfolio leads to less reduction in portfolio risk when the new stock exhibits a higher (or more positive) correlation with the stocks already present in the portfolio.

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  • Search Terms: a. b. false true (or a adding additional already an and between chosen correlation degree existing higher in less more new of portfolio's portfolio, positive) randomly reduce risk. stock stocks the to when will
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