The Correlation of the Returns of a Risk-Free Treasury Bond

question 3

Multiple Choice

The correlation of the returns of a risk-free Treasury bond with the returns of the general stock market will be

• A)equal to 0.0.
• B)between -1.0 and +1.0, depending on the yield-to-maturity of the Treasury bond.
• C)equal to 1.0.
• D)equal to -1.0

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