The Term Corr (ε R,ε T) = 0 Tells Us

question 51

Multiple Choice

The term Corr (ε R,ε T) = 0 tells us that:

• A) all error terms of company R and T are 0.
• B) the unsystematic risk of companies R and T is unrelated or uncorrelated.
• C) the correlation between the returns of companies R and T is -1.
• D) the systematic risk of companies R and T is unrelated.
• E) None of these.