Which One of the Following Correlation Coefficients Can Provide the Greatest

question 77

Multiple Choice

Which one of the following correlation coefficients can provide the greatest diversification benefit?

• A)−1.0
• B)−.5
• C)0
• D).5
• E)1.0

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Definitions:

Net Income

The amount by which revenues exceed expenses.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company.

Profitability Ratios

Financial metrics used to assess a business's ability to generate earnings relative to its revenue, operating costs, balance sheet assets, or shareholders' equity.

Operating Effectiveness

A measure of how well an organization is managing its core business functions to achieve its objectives efficiently and effectively.