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Suppose a portfolio consists of four assets the risk

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Suppose a portfolio consists of four assets. The risk contribution of each asset is as follows: UK Large Cap, 3.9%; UK Small Cap, 4.2%; UK Bonds, 0.9%; Non-UK Bonds, 1.1%. Which of the following explanations would not be a possible explanation for the relatively high risk contribution values for UK equities?

A. High expected returns on UK equities

B. High weights on UK equities

C. High volatilities of UK equities

D. High correlation of UK equities with all other assets in the portfolio

Reference no: EM13568247

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