When Variables Change in the Same Direction,what Type of Correlation

question 16

Multiple Choice

When variables change in the same direction,what type of correlation is this called?

• A)positive correlation
• B)negative correlation
• C)positive causation
• D)negative causation

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Definitions:

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a certain time frame.

Exercise Price

The specified price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Risk-Free Rate

The return on investment of a risk-free asset, typically considered as government bonds, where the investor is assumed to have zero default risk.

Quoted Price

A quoted price is the most recent price at which an asset or service was traded or offered for trade, reflecting the current market value as quoted on an exchange or in other financial contexts.