John is concerned about adding risk to his portfolio. He can choose between two assets, Asset A has a correlation with

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answerhappygod
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John is concerned about adding risk to his portfolio. He can choose between two assets, Asset A has a correlation with

Post by answerhappygod »

John is concerned about adding risk to his portfolio. He
can choose between two assets, Asset A has a correlation with his
existing portfolio of 0.70 and Asset B has a correlation with his
existing portfolio of 0.05. If John is only concerned about
the risk of his portfolio, which asset should he add to his
portfolio?
Multiple Choice
Asset B
Need the expected returns
Asset A
Neither asset since both have a positive correlation with the
existing portfolio
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