Question: 1. When PAB = + 1 and we know the return on Security A, we can predict the return on Security B with certainty.

1. When PAB = + 1 and we know the return on Security A, we can predict the return on Security B with

1. When PAB = + 1 and we know the return on Security A, we can predict the return on Security B with certainty. II. Generally, security returns display positive correlations with one another however they are less than one; this is because all securities tend not to follow the movements of the overall market. III. Any value of correlation less than + 1. provides a possibility of diversification. I and II are correct, III is incorrect. I and II are incorrect, III is incorrect. I is incorrect, II is correct, III is correct. I is correct, II is incorrect, III is correct.

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