Question: Two stocks (A & B) have a negative correlation. Which of the following is most likely to be true? When stock A goes up, stock

$Two stocks (A \& B) have a negative correlation. Which of$

Two stocks (A \& B) have a negative correlation. Which of the following is most likely to be true? When stock A goes up, stock B is likely to go down Stock A and stock B must be in different industries If stock A goes up, it is because stock B went down One day stock A goes up. Stock B also went up None of the above

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!

Two stocks (A & B) have a negative correlation. Which of the following is most likely to be true? When stock A goes up, stock B is likely to go down Stock A and Stock B must be in different...

Two stocks (A \& B) have a positive correlation. Which of the following is most likely to be true? When stock A goes up, stock B is likely to go up as well Stock A and stock B must be in the same...

need help asap Valley Enterprises Inc has recently paid a dividend (Do) of $ 3.25/share. The dividend growth next year is expected to be 20% and the following year, 15%. From the third year onwards,...

Economics,,, 12. Long answer (25 points). Suppose that we have a labor market in equilibrium. The labor demand curve is Ly = 1000 - 25w, and the labor supply curve is L, = 100 + 20w. Suppose the...

26. For this problem assume that it is possible to borrow and lend risklessly at a rate of 4%. Also assume that the expected return on the tangency (i.e., the optimal) portfolio composed only of...

1. A portfolio comprises two stocks, A and B, with eqaul amounts of money invested in each. If stock A's stock price increases and that of stock B decreases, the weight of stock A in the portfolio...

1.Let three stocks A, B, and C. The correlation coefficient between rates of return of A and of B equals 1, that is, A,B = 1. As a result a.B,C > 0 b.B,C

Parmacheenee Belle's entire common stock portfolio ($500,000) is allotted to an index fund tracking the Standard & Poors 500 index. The expected rate of return on the index is 9.5% and the standard...

Please evaluate the two statements below. 1 : Investors prefer diversified companies because they are less risky 2 : The contribution of a stock to the risk of a well - diversified portfolio depends...

Can you please review my answers for Q5, but I really need help on Q6. Thank you. Show all work computing to four decimal places. Set your calculator at 4 (four) decimal places (how? Texas Instrument...

People who are addicted to drugs, spend more of their possible income on drugs and get more drug-dependent which make it more difficult to lower drug use. How is their income elasticity to demand for...

The cash flows of Project A are expressed in real terms, whereas those of Project B are expressed in nominal terms. The appropriate nominal discount rate is 13 percent and the inflation rate is 4...

Select the correct answer. What collateral secures a mortgage? A. 5% of the purchase price of the house B. the house itself C. 10% of the purchase price of the house D. none

Consultex, Incorporated, was founded in 2018 as a small financial consulting business. The company had done reasonably well from 2018 through 2020 but started noticing its cash dwindle early in 202...