Question: If the correlation between two stocks is -1, the returns on the stocks: Group of answer choices have standard deviations of equal size but opposite

If the correlation between two stocks is -1, the returns on the stocks: Group of answer choices have standard deviations of equal size but opposite signs. move perfectly opposite to one another. are unrelated to one another. generally move in the same direction. totally offset each other producing a rate of return of zero.

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!