Multiply

question 25

Multiple Choice

Multiply.

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Definitions:

Correlation Coefficient

A statistical measure that calculates the strength and direction of the relationship between two variables or assets.

Diversification

A risk management technique that mixes a wide variety of investments within a portfolio to minimize the impact of any single asset's performance.

Negatively Correlated

Refers to two variables that move in opposite directions, meaning when one variable increases, the other decreases, and vice versa.

Positively Correlated

A relationship between two variables in which they move in the same direction, meaning as one variable increases, the other also increases.