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Question

Risk of a portfolio can be minimised by which one of the following ?

A Combining two securities having perfect positive correlation in their expected returns.
B Combining two securities having perfect negative correlation in their expected returns.
C Combining two securities having partially positive correlation in their expected returns.
D Combining two securities having partially negative correlation in their expected returns.

Answer & Explanation

Answer:Combining two securities having perfect negative correlation in their expected returns.

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