If Returns on Two Stocks Tended to Move in Opposite

question 14

True/False

If returns on two stocks tended to move in opposite directions, then the covariances and correlations on the two stocks would be negative.

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Definitions:

Fair Value

An assessment of an asset or liability's market worth, determined by current market rates or appraisals.

Noncash Assets

Assets that are not in the form of cash but can be converted into cash, such as investments, real estate, and inventory.

Book Value

The net value of an asset, calculated as the asset’s original cost minus depreciation, amortization, or impairment costs.

Fair Value

An estimate of the price at which an asset or liability could be bought or sold in a current transaction between willing parties.