a.Supposewe have two assets, A and B. What correlation levels between the two assetswill yield diversification benefits in terms of portfolio risk reduction?

QUESTION:
Suppose we have two assets, A and B. What correlation levels between the two assets will yield
diversification benefits in terms of portfolio risk reduction?
SOLUTION:
Correlation can be defined as the statistical measure of how two securities will move in relation
to each other. The correlation coefficient varies between -1 to +1. The positive correlation i.e. +1
implies...