TD - Correlated and uncorrelated assets

¥1,470 JPY

QUESTION
Reconsider the above question from the point of view of diversification to
reduce risk. Does this make sense when the assets are
(a) perfectly positively correlated (ρ12 = 1);
(b) perfectly uncorrelated (ρ12 = 0);
(c) the shares are perfectly negatively correlated (ρ12 = −1).
In the case of (c), show that it is theoreticly possible to obtain a risk-free
portfolio.

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