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← Time Diversification
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Question
What does "time diversification" claim about the risk of holding equities over long periods?
1
That correlations between equities decrease over time, producing diversification benefits
2
That holding equities for longer automatically guarantees above-inflation returns
3
That the annualised standard deviation of equity returns decreases as the holding period lengthens
4
That equities have no risk at all over 30-year periods, as historical returns have always been positive
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