Question: 2-The closer the correlation is to 0, the more the returns tend to move together as a result of common risk Is it correct ?

2-The closer the correlation is to 0, the more the returns tend to move together as a result of common risk Is it correct ? Explain.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

This problem continues the Canyon Canoe Company situation from Chapter 2. You will need to use the unadjusted trial balance and posted T-accounts. At December 31, the business gathers the following...

Q:

Which of the following statements is FALSE? Select one: a. If two stocks move together, their returns will tend to be above or below average at the same time, and the covariance will be positive. b....

Q:

Which of the following statements is FALSE? Volatility is the square root of variance. Dividing the covariance by the volatilities ensures that correlation is always between - 1 and +1. If two stocks...

Q:

Which of the following statements is FALSE? Volatility is the square root of variance. Dividing the covariance by the volatilities ensures that correlation is always between-1 and +1. If two stocks...

Q:

Which of the following statements is FALSE? Volatility is the square root of variance. Dividing the covariance by the volatilities ensures that correlation is always between -1 and +1. If two stocks...

Q:

1. Which of the following statements is FALSE? The closer the correlation is to 0, the more the returns tend to move together as a result of common risk. Volatility is the square root of variance....

Q:

Which of the following statements is FALSE? a. Volatility is the square root of variance. b. The closer the correlation is to 0, the more the returns tend to move together as a result of common risk....

Q:

urgent!! O c. distribution date. O d. declaration date. Which of the following statements is FALSE? Select one: O a. The closer the correlation is to 0, the more the returns tend to move together as...

Q:

Which four statements are correct? Mark the four correct choices: In finance, the variance of a return is also referred to as its volatility. A disadvantage of the WACC method is that you need to...

Q:

PLEASE EXPLAIN LONG AND CLEARLY. 1) Explain Advantages and disadvantages of using IRR.( Internal Rate of Return). 2) -"The closer the correlation is to 0, the more the returns tend to move together...

Q:

TRUE or FALSE? Mark the correct answer for each statement. a. The expected or mean return is calculated as a weighted average of the possible returns, where the weights correspond to the...

Q:

The first two terms of a sequence arc a_(1)=3 and a_(2)=-1. Let a_(3) be the third term when the sequence is arithmetic and let b_(3) be the third term when the sequencs is gesmetric. What is the...

Q:

A promissory note reads: "I promise to pay to the order of B P10,000, 30 days after date". Sgd. A A issued the promissory note to B indorsed it to C. Then X stole the note from C, forged the...

Q:

Tax - delerred annuties pay no laxes on the income placed into the accourt, but then pay taxes on all the money when if is withdrawn. Nondeferred plans pay taves on the income prior to depositing the...

Q:

Which of the following is not a product - level activity? Material handling Product design Engineeting changes Inventory management

Q:

1. What are some examples of hidden histories, and why are they hidden?

Q:

5. When can contact between members of two cultures improve their attitudes toward each other and facilitate communication between them?

Q:

2. How do the various histories of the United States influence our communication with people from other countries?