Which of the following statements is FALSE? A) The maximum benefits t
Which of the following statements is FALSE?
A) The maximum benefits to diversification between securities occur when they are perfectly positively correlated.
B) The maximum benefits to diversification between securities occur when they are perfectly negatively correlated.
C) There is some benefit to diversification when the correlation between securities is 0.0.
D) There is some benefit to diversification when the correlation between securities is greater than 0.0 but less than 1.0.
ANSWER
Answer: A
Explanation: A) The maximum benefits to diversification between securities occur when they are perfectly negatively correlated.
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