Which of the Following Describes a Positive Correlation

question 28

Multiple Choice

Which of the following describes a positive correlation?

• A) There is no relationship between the variables.
• B) When the value of one variable goes down, the value of the other goes up.
• C) When the value of one variable goes up, the value of the other goes up.
• D) When the value of one variable goes up, the value of the other variable goes down.

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Definitions:

Premium

An amount paid over the regular price or the intrinsic value for securities, insurance policies, or other financial products.

Margin Deposits

Funds that an investor must deposit as collateral to borrow from a broker to buy securities, typically used for trading on margin.

Call Options

Financial derivatives that grant the holder the option to purchase stocks or other assets at a predetermined price before the option expires.

Put Options

A financial contract granting the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified timeframe.