Q122
_____________is concerned with the interrelationships between security returns.
A.
random diversification
B.
correlating diversification
C.
Friedman diversification
D.
Markowitz diversification
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Markowitz diversification is concerned with the interrelationships between security returns. A strategy that seeks to combine in a portfolio assets with returns that are less than perfectly positively correlated, in an effort to lower portfolio risk (variance) without sacrificing return.