-The Correlation of Returns Between Asset a and Asset B

question 31

Multiple Choice

$$\begin{array}{l}\text { Expected Return (\%) }\\\begin{array} { c c c c } \text { Year } & \text { Asset A } & \text { Asset B } & \text { Asset C } \\\hline 1 & 6 & 8 & 6 \\2 & 7 & 7 & 7 \\3 & 8 & 6 & 8\end{array}\end{array}$$
-The correlation of returns between Asset A and Asset B can be characterized as (See Figure 7.1)

• A) perfectly negatively correlated.
• B) uncorrelated.
• C) perfectly positively correlated.
• D) cannot be determined.

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Definitions:

Inherited Mutations

Genetic changes that are passed from parents to offspring, which can result in genetic disorders or variations in physical traits.

Cell Membrane

The semi-permeable membrane surrounding the cytoplasm of a cell, which regulates entry and exit of substances.

Substances

Materials or items that can have a specific composition and properties, which can range from chemicals to drugs.

Transport

The movement of substances across distances or through cellular structures, such as the transport of nutrients across cell membranes.