Which of the Following Statements About Correlation Is Incorrect

question 56

Multiple Choice

Which of the following statements about correlation is incorrect?

• A) If two variables are statistically independent of each other, their correlation coefficient is zero.
• B) Negatively correlated investments offer the best opportunities for diversification.
• C) If two investments are perfectly correlated, their correlation coefficient is +1.
• D) The risk of fire is positively correlated with the risk of traffic accidents.

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Definitions:

Repudiated

Refused to accept or be associated with; rejected or denied the validity or authority of something.

Contract

A lawful pact made between two or more parties, which can be upheld by legal means.

Repudiated

The act of rejecting or disowning a contractual obligation or agreement, often leading to termination of the contract.

Merchant

A business or individual engaged in the trade of goods, services, or commodities for profit.