The Concept of Stock Correlation Shows

question 11

Multiple Choice

The concept of stock correlation shows:

• A) The extent to which the variance of two stocks are similar.
• B) The average returns of two stocks.
• C) The average risk of two stocks.
• D) How risky two assets are.
• E) The extent to which the returns on two assets move together.

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Definitions:

Normal Good

A good whose demand increases as consumers' income rises, holding all other factors constant.

Students' Incomes

The earnings received by students from part-time jobs, stipends, or scholarships, contributing to their financial support.

Demand

The amount of a product or service that buyers are ready and can afford to buy at different price points within a specified time frame.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at those prices.