Security a and Security B Have a Correlation Coefficient of 0

question 54

Multiple Choice

Security A and Security B have a correlation coefficient of 0. If Security A's return is expected to increase by 10 percent, Security B's:

• A) return should also increase by 10 percent.
• B) return should decrease by 10 percent.
• C) return should be zero.
• D) expected return is impossible to determine from the above information.