Which of the Following Illustrates the Range of Possible Values

question 20

Multiple Choice

Which of the following illustrates the range of possible values of Pearson's product-moment correlation coefficient?

• A)-.01 to .01
• B)-1.0 to 1.0
• C)-2.0 to 2.0
• D)-3.0 to 3.0

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Definitions:

Reward

Typically refers to the potential gains or returns derived from an investment or action, balanced against the risk involved.

Volatility

The degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns.

Portfolio Excess Return

The return on an investment portfolio that exceeds the return of a benchmark or risk-free asset.

Standard Deviation

A statistical measure of the dispersion of a set of data from its mean, used in finance to quantify the volatility of investment returns.