Stocks a and B Have a Correlation Coefficient of +1

question 106

Multiple Choice

Stocks A and B have a correlation coefficient of +1.If stock A went from $10 to $12 over the past month, what is the price of stock B, if its price one month ago was $5?

• A)$5
• B)$4
• C)$6
• D)Cannot be determined

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Definitions:

Mortgage

A loan secured by real property, typically real estate, that the borrower is obliged to pay back with a predetermined set of payments.

Compounded Monthly

Describes a situation where interest is added to the principal balance of a loan or deposit on a monthly basis, increasing the amount of future interest.

Compounded Monthly

An interest calculation method where the interest earned each month is added to the principal, becoming the base for calculating future interest.

Obscenity

Material or content that depicts sexual conduct in a manner considered offensive by community standards and lacking serious artistic, political, or scientific value.