What portion of the risk of the portfolio can be eliminated through diversification?

Posted by: Pdfprep Category: GLO_CWM_LVL_1 Tags: , ,

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

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