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NEW QUESTION: 1
For a pair of correlated assets, the achievable portfolio standard deviation will be the lowest when the correlation is:
A. = -0.33
B. = 0.33
C. = 1
D. = 0
The lowest achievable standard deviation will be lowest when the assets are perfectly negatively correlated, ie when correlation = -1. In the case of the above choices, the lowest correlation is -0.33, which is the correct choice.
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