Suppose there is Portfolio “P” available for investment in the market which has a correlation with the market of 0.70.
What portion of the risk of the portfolio can be eliminated through diversification?
A . 49%
B . 30%
C . 70%
D . 51%
Answer: D
Suppose there is Portfolio “P” available for investment in the market which has a correlation with the market of 0.70.
What portion of the risk of the portfolio can be eliminated through diversification?
A . 49%
B . 30%
C . 70%
D . 51%
Answer: D