You Have Plotted the Data for Two Securities Over Time

question 55

Multiple Choice

You have plotted the data for two securities over time on the same graph, ie., the month return of each security for the last 5 years. If the pattern of the movements of the two securities rose and fell as the other did, these two securities would have:

• A) no correlation at all.
• B) a weak negative correlation.
• C) a strong negative correlation.
• D) a strong positive correlation.

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Definitions:

Profitability

The financial metric used to assess the ability of a business to generate earnings compared to its expenses and other relevant costs.

Seasonal Workforce

Employment that changes with the seasons, often increasing during peak production times and decreasing in off-peak seasons.

Peak Season

The time of year when demand for services or goods is highest, often leading to increased business activity.

Collaboration

Working together cooperatively among businesses or entities towards a common goal or project, often enhancing performance or outcomes.