CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

Which of the following correlation coefficients would most effectively reduce the risk of a portfolio?
A. -1
B. 0
C. -2
Explanation: Correlation coefficients: the measurement of joint movement between two variables.

User Contributed Comments 2

User Comment
JCopeland 0 would reduce the risk as well. Although, a correlation coefficent of -1 would reduce risk to the rf rate (assuming equal weight with the portfolio) -2 is not possible
Jurrens possible with leverage
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