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NEW QUESTION: 1
You are considering a portfolio only of long positions not involving leverage and have the following information:
Stock | Expected Return | Variance | Correlation1 |15% | 100 | R1,2 = 0.6
2 |18% | 64 | R1,3 = 0.2 3 |24% | 400 | R2,3 = -1.0
Consider a portfolio consisting of only Stock 2 and 3. Choose the correct statement:
A. the risk of this portfolio could be zero under the right circumstances.
B. with weights of 0.5 and 0.5 in each stock, the risk of the portfolio will necessarily be reduced to zero because of the -1.0 correlation coefficient.
C. the standard deviation of this portfolio could be larger than 20%.
Answer: A
Explanation:
Given the -1.0 correlation between the two securities, the risk of this portfolio could be zero if the correct amount were invested in each.

NEW QUESTION: 2
Freight units can be based on delivery-based transportation requirements. Determine whether this statement is true or false. Please choose the correct answer.
A. False
B. True
Answer: B

NEW QUESTION: 3
Which statement is true, as relates to classful or classless routing?
A. RIPv1 and OSPF are classless routing protocols.
B. Classful routing protocols send the subnet mask in routing updates.
C. EIGRP and OSPF are classful routing protocols and summarize routes by default.
D. Automatic summarization at classful boundaries can cause problems on discontiguous subnets.
Answer: D
Explanation:
RIPv1, RIPv2, IGRP, and EIGRP all auto-summarize classful boundaries by default (OSPF does not).To make discontiguous networks work, meaning you don't want classful boundries to summarize, you need to turn off auto-summary.
http://www.ciscopress.com/articles/article.asp?p=174107&seqNum=3