Which One of the Following Correlation Coefficients Must Apply to Two

question 32

Multiple Choice

Which one of the following correlation coefficients must apply to two assets if the equally weighted portfolio of those assets creates a minimum variance portfolio that has a standard deviation of zero?

• A)−1.0
• B)−.5
• C)0
• D).5
• E)1.0

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Definitions:

Walmart And P&G

Two major corporations, Walmart, a retail giant, and Procter & Gamble (P&G), a multinational consumer goods company, known for their strategic partnerships and business relations.

JIT

Just-In-Time, a manufacturing methodology aimed at reducing flow times within production as well as response times from suppliers and to customers.

Vertical Integration

A strategy where a company expands its business operations into different steps on the same production path, such as a manufacturer owning its supplier and/or distributor.

Upstream Suppliers

Companies or entities that provide raw materials, components, or services to another company for the production of goods.