Busıness Fınance I Deneme Sınavı Sorusu #846554

What is the effect of combining assets with negative correlation on the expected return and expected risk (variance) of a portfolio?  


It increases the expected return, but decreases the expected risk

It decreases the expected return, but increases the expected risk

It decreases both the expected return and the expected risk

It increases both the expected return and the expected risk

It doesn't affect the expected return and but decreases the expected risk


Yanıt Açıklaması:

Combining assets with negaive correlation decreases both the risk and rate of return of a portfolio.

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