Which one of the following statements is NOT correct about globally diversifying a portfolio?
A) Diversification may lower the standard deviation of portfolio returns.
B) Diversification is effective even if correlation coefficients are above .9
C) The standard deviation of portfolio returns can be reduced if correlation coefficients do not equal 1.
D) Diversification using securities from segmented and rather price inefficient markets can reduce overall portfolio risk.
Correct Answer:
Verified
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