Question: You are constructing a scatter plot of excess returns for stock A versus the market index. If the correlation coefficient between stock A and the
You are constructing a scatter plot of excess returns for stock A versus the market index. If the correlation coefficient between stock A and the index is 0.1, you will find that the points of the scatter diagram (select one: all fall on the line of best fit; are widely scattered around the line) and the line of best fit has a (select one: positive; negative) slope.
- A. all fall on the line of best fit; positive slope
- B. all fall on the line of best fit; negative slope
- C. are widely scattered around the line; positive slope
- D. are widely scattered around the line; negative slope
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