If the Correlation Coefficient Between X and Y Is Equal

question 27

Multiple Choice

If the correlation coefficient between x and y is equal to -1, we say that x and y are

• A) imperfectly negatively correlated.
• B) perfectly negatively correlated.
• C) lagging variables.
• D) perfectly positively correlated.
• E) countercyclical.

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Definitions:

Variable Rate

An interest rate that can change over the period of a loan or mortgage based on underlying benchmark interest rates or indices.

Financial Risk Management

The method of safeguarding a company's economic value through the utilization of financial tools to control exposure to risks, notably market risk and credit risk.

Risk Profiles

Descriptions of an individual's or organization's willingness to take risks, as well as the threats to which they are exposed.

Risk Profile

A risk profile assesses the willingness and ability of an individual or entity to take risks, often used in financial planning to tailor investment strategies.