Question: Security A and Security B have a correlation coefficient equal to 0 . 7 . Which of the following statements is correct? Security A and

Security A and Security B have a correlation coefficient equal to 0.7. Which of the following statements is correct?
Security A and Security B will mostly move in same direction and seldomly in opposite directions
Security A and Security B will always move in the same direction
Security A and Security B will not move in the same direction most of the time
Security A and Security B will move in same directions by the same amount

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 Databases Questions!

Q:

Post-SOX (Sarbanes-Oxley Act) academic research on internal control focuses on the characteristics of publicly listed companies disclosing material control weaknesses or the consequences experienced...

Q:

6.1. Carbondale Company has the following credit policy 2/10, net 30. Carbondale also charges 1% per month interest on all accounts after 30 days. The following table shows the collection schedule of...

Q:

8.1. Dulles Electric Company buys 1 million tons of coal annually to burn at its power plant. The company wants to invest in a unit train that will haul coal from the mine to the power house, where...

Q:

1. According to the Markowitz model a) an efficient frontier for all assets can be drawn b) international diversification is not allowed c) only assets with negative correlations are included d) a...

Q:

Finance just short answer please A or B or C or D or E Which of the following statements is (are) true regarding the variance of a portfolio of two risky securities? 14. A) The higher the coefficient...

Q:

5. Portfolio Analysis DO NOT USE EXCEL! PLEASE SHOW ALL WORK BY HAND! Suppose there are two common stocks available for investment, stock A and stock B, with the following characteristics: Stock A...

Q:

A. estimate a beta for each of the following securities assuming that the standard deviation of returns for the market portfolio (m) is 8.0 percent. Security P: expected return: 12% standard...

Q:

1. For each 1% change in the market portfolio's excess return, the investment's excess return is expected to change by ________ percent due to risks that it has in common with the market. a. cannot...

Q:

32. Jim and Joan are married and both are age 70. They have adjusted gross income of $42,000 and social security benefits of $6,000. The amount of the social security benefits included in income is...

Q:

8. 7. Financial risk is most associated with: A. the use of equity financing by corporations B. the use of debt financing by corporations C. equity investments held by corporations D. debt...

Q:

Three admission test preparation programs are being evaluated. The scores obtained by a sample of 20 people who used the programs provided the following data. Use the Kruskal Wallis test to determine...

Q:

Calculate the missing statement of financial position amounts in each of the following independent situations: $650,000$ ?$150,000 $320,000 760,000 Current assets Non-current assets Total assets...

Q:

When obruenousisele is treabed with N a N H 2 in N H 3 ( th a sractive proceeding via a bencyne intermediutc, what tro o - methourariline p - methowaniline m - methoryaniline

Q:

1. Does whether constructive feedback necessarily need to be positive? In addition, discuss how constructive criticism can be based on prejudice and unconscious bias. Explain your answers. 2. How...

Q:

7. What are the managers roles in a career management system? Which role do you think is most difficult for the typical manager? Which is easiest? List the reasons why managers might resist...

Q:

6. What is a psychological contract? How does the psychological contract influence career management?

Q:

4. What are the three components of career motivation? Which is most important? Which is least important? Why?