To reduce risk as much as possible, you should combine assets which have one of the following correlation relationships?
A)strong positive
B)slightly positive
C)slightly negative
D)strongly negative
E)zero

Question

Quizplus · Accepted Answer

To minimize risk in a portfolio, combining assets with a strongly negative correlation is most effective because their prices move in opposite directions, reducing the overall volatility of the portfolio.

To Reduce Risk as Much as Possible, You Should Combine