Particulars Falcon International Triumph InternationalAverage Return (%) 10 8 Average Volatility (%) 12 15 For the portfolio to yield lower risk than the individual stocks, the correlation coefficient of stocks should be

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Question:

Particulars Falcon International Triumph InternationalAverage Return (%) 10 8 Average Volatility (%) 12 15 For the portfolio to yield lower risk than the individual stocks, the correlation coefficient of stocks should be

A.

Less than 1.25

B.

Less than 0.85

C.

Less than 0.80

D.

More than 0.83

Answer» c. Less than 0.80

Note: The above multiple-choice question is for all general and Competitive Exams in India.