A Correlation Coefficient of -.89 Indicates A(n)

question 325

Multiple Choice

A correlation coefficient of -.89 indicates a(n)

• A)weak negative correlation.
• B)strong negative correlation.
• C)cause and effect relationship.
• D)error in computation.

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Definitions:

Mixed Asset Classes

Investment portfolios that include a combination of stocks, bonds, and other securities to achieve diversification.

Equity Funds

Investment funds that primarily invest in stocks, aiming to provide growth or income to investors.

Bond Funds

Investment funds that pool money from various investors to purchase a diversified portfolio of bonds, providing income and diversification.

Net Asset Value

The total value of a fund's assets minus its liabilities, often used to determine the value of shares in a mutual fund or ETF.