The maximum benefits of portfolio construction are obtained when the correlation between assets is ________.
A)-1.0
B)0.0
C)+1.0
D)none of the above

Name: The maximum benefits of portfolio construction are obtained when the correlation between assets is ________. A)-1.0 B)0.0 C)+1.0 D)none of the above
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Question

Quizplus · Accepted Answer

When the correlation between assets is -1.0, it means they move in exactly opposite directions, providing the maximum diversification benefit and reducing overall portfolio risk.

The Maximum Benefits of Portfolio Construction Are Obtained When the Correlation