Which of the Following Statements Is Correct

question 98

Multiple Choice

Which of the following statements is correct?

• A)Stocks and long-term Treasury bonds are highly positively correlated.
• B)Stocks and Treasury bills are highly positively correlated.
• C)Stocks, long-term Treasury bonds, and Treasury bills are all highly correlated.
• D)None of these statements is correct.

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Definitions:

Depreciation

The accounting method of allocating the cost of a physical or tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

EBIT

A financial metric that calculates a company's profit by including all costs except for interest and income tax expenses, known as Earnings Before Interest and Taxes.

Free Cash Flow

The amount of cash a company generates after accounting for capital expenditures needed for operations. It is an important measure of financial performance and liquidity.

Capital Expenditures

Long-term investments made by a company in buildings, equipment, or other assets to improve or maintain its business operations.