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All of the following statements are false. Please change the incorrect parts to make them true. DO NOT negate the sentence, unless necessary.

1. The correlation coefficient between two assets equals their covariance divided by the product of variances.

2. Diversification is most effective when security returns are uncorrelated.

3. Consider an investment opportunity set formed with two securities that are perfectly negatively correlated. The minimum-variance portfolio has a standard deviation of -1.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92313575

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