If the Correlation of Prices Between Two Stocks Is 0

question 41

Multiple Choice

If the correlation of prices between two stocks is 0.35,then the price of one stock would be expected to:

• A) rise when the other stock price falls.
• B) rise by 35% when the other stock price is unchanged.
• C) fall when the other stock price falls.
• D) fall by 35% when the other stock price is unchanged.

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Definitions:

Determinism

The philosophical concept that all events, including moral choices, are completely determined by previously existing causes.

Fatalistic Stance

A belief system where events are predetermined by fate, leading to acceptance of all outcomes as inevitable, regardless of one's own actions or efforts.

Personal-Document Technique

A research method involving the analysis of personal documents (diaries, letters, etc.) to gain insight into an individual's life, thoughts, and feelings.

Computer Analysis

The use of computers and software to analyze data, perform calculations, or solve problems, often involving algorithms and statistical methods.