To reduce your investment risk, you should select stocks whose returns exhibit a ________ positive correlation rather than a ________ positive correlation.
A) high; high
B) low; high
C) high; low
D) low; low

Question

Quizplus · Accepted Answer

To reduce investment risk, diversification is key. Selecting stocks with a low positive correlation rather than a high positive correlation means the stocks' returns don't move in tandem as closely, spreading out risk more effectively.

To Reduce Your Investment Risk, You Should Select Stocks Whose