Covariances Between Security Returns Tend to Be

question 9

Multiple Choice

Covariances between security returns tend to be

• A) positive because of SEC regulations.
• B) positive because of Exchange regulations.
• C) positive because of economic forces that affect many firms.
• D) negative because of SEC regulations.
• E) negative because of economic forces that affect many firms.

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Definitions:

Statistical Control

The use of statistical methods to monitor and control a process or production method to maintain its quality and efficiency.

Assignable Causes

Factors in a production process that can be identified and eliminated, known for causing variations in statistical process control.

Mean Charts

Graphical representations used in statistical process control that plot the mean values of a series of measurements over time.

Range Charts

Tools used in statistical process control that display the range of variability in a process over time.