asset valuation

a study shows a positive correlation between global stock index and US S&P 500 index and between global and US government bonds index. MR X said (1) a portfolio that matches the US government bonds index would benefit from divefying into global bonds. (2) A portfolio that matches S&P 500 index however is already well divesrfied and wou;ld not benefit from global diversfication Is Mr X a. correct: b. incorrect about bonds c. incorrect about stocks d. incorrect about both

C. 1)As long as it is not perfectly correlated then it wouuld benefit from diversification 2)Same reason

C- global diversification for both - bonds and stocks

yes c is the answer