Projects That Are Negatively Correlated

question 87

Multiple Choice

Projects that are negatively correlated

• A)reduce the standard deviation of returns for the firm.
• B)increase the possible losses of the firm.
• C)are generally in the same industry.
• D)None of these options

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Definitions:

Futures Contract

Agreements to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Corn

A cereal plant that yields large grains, or kernels, set in rows on a cob; often grown as food for humans and fodder for animals.

Futures Price

The agreed-upon price for a financial instrument or commodity to be delivered and paid for at a future date.

Orange Juice

A liquid extract of the orange tree fruit, consumed as a beverage or used in culinary dishes and as a commodity traded on futures markets.