The Correlation Measures The

question 17

Multiple Choice

The correlation measures the:

• A) Rate of movements of the return of individual stocks
• B) Direction of movement of the return of individual stocks
• C) Direction of movement between the returns of two stocks
• D) Stock market volatility

---

Definitions:

Competitive Firm

A company that operates in a market where it must compete with other firms for customers, characterized by the inability to control market prices.

Higher Profits

Increased earnings resulting from a rise in revenue, a decrease in costs, or both.

Resource Cost

The total cost associated with the utilization of resources such as labor, capital, and materials in the production of goods and services.

Marginal Cost

Marginal cost is the additional cost incurred from producing one more unit of a good or service. It varies depending on the level of production and can influence pricing and production decisions.