1. When combining many assets into a portfolio the correlation between the variables has a(n) ____ impact on the overall risk of the portfolio than the overall risk of each asset.

a. larger

b. equal

c. smaller

d. none of the above

2. The opportunity costs the firm incurs by maintaining current assets are called____________ and they usually rise with the level of investment in current assets.

A) costs of goods sold

B) order costs

C) carrying costs

D) shortage costs

3. If we compare the historical returns for two stocks from different industries in the United States, it is very likely that the correlation coefficient between these two stock returns is zero.

True

False