Which of the Following Correlation Coefficients Indicates the Strongest Relationship

question 111

Multiple Choice

Which of the following correlation coefficients indicates the strongest relationship between two variables?

• A)+)78
• B)-)84
• C)+)35
• D)00

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Definitions:

Current Stock Price

This refers to the present value at which a stock is traded on the market.

Weak Form

In finance, a theory suggesting that asset prices fully reflect all information contained in past trading data, meaning past prices and volumes cannot predict future prices.

Security Price

The security price is the current market value at which a particular security (like stocks, bonds) can be bought or sold in the financial markets.

Abnormal Return

The difference between the actual return of a security and the expected return predicted by an equilibrium model.