Question: If the correlation between two stocks is -1, the returns on the stocks: Group of answer choices 1- have standard deviations of equal size but
If the correlation between two stocks is -1, the returns on the stocks:
Group of answer choices
1- have standard deviations of equal size but opposite signs.
2- totally offset each other producing a rate of return of zero.
3- move perfectly opposite to one another.
4- are unrelated to one another.
5- generally move in the same direction.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
