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In Problem 4, If the Correlation Coefficient Is -1 and You

Question 17

Multiple Choice

In problem 4, if the correlation coefficient is -1 and you want to completely eliminate the risk of the portfolio, then you will invest


A) 0.3 in A and 0.7 in B
B) 0.4 in A and 0.6 in B
C) 0.6 in A and 0.4 in B
D) 0.8 in A and 0.2 in B
E) any combination will eliminate the risk completely since the correlation coefficient is -1

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