If the Correlation Between Two Shares Is −1, the Returns

question 38

Multiple Choice

If the correlation between two shares is −1, the returns:

• A)generally move in the same direction.
• B)move perfectly opposite one another.
• C)are unrelated to one another as it is < 0.
• D)have standard deviations of equal size but opposite signs.
• E)None of the above.

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Definitions:

Pleasurable Sensation

A feeling of enjoyment or satisfaction experienced through various stimuli, which can be physical, emotional, or cognitive.

Satin Edge

A type of fabric finish where the edge is made with satin, giving it a smooth, glossy appearance.

Adaptation

Piaget’s term for adjustment to new information about the environment, achieved through processes of assimilation and accommodation.

Circular Reactions

Piaget’s term for processes by which an infant learns to reproduce desired occurrences originally discovered by chance.