Question: Use the following three statements to answer this question: 1. Assuming PAB = 1 or PAB = -1, assuming further we know the increases of

Use the following three statements to answer this question: 1. Assuming

Use the following three statements to answer this question: 1. Assuming PAB = 1 or PAB = -1, assuming further we know the increases of Security A, we can predict the movement of Security B with certainty. II. Generally, security retums display positive correlations with one another but they are less than one, because all securities tend not to follow the movements of the overall market. III. Any value of correlation less than +1 provides a possibility of diversification. O a. Only Il is correct O b. Only Ill is correct Oc Only II and III are correct O d. Only I and II are correct Oe. Only I and III are correct

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