Vidyalelo
Management · Q783

International Finance and Treasury

Graduate and Post Graduate · Management · question 783

Q783

Who concern with relations between security returns

A.
Markowitz diversification
Answer
B.
random diversification
C.
Friedman diversification
D.
correlating diversification

Answer: Option A

Solution

Answer: Option A
Solution:
Markowitz diversification concern with relations between security returns. Markowitz diversification is 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. Related: Naive diversification.