For the Most Part, Stock Returns Tend to Move Together

question 67

True/False

For the most part, stock returns tend to move together. Thus, pairs of stocks tend to have both positive covariances and correlations.

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Definitions:

Plausible

Seeming reasonable or probable under the circumstances.

Production Function

A mathematical model that describes the relationship between inputs used in production and the resultant output.

Maximum Output

The highest amount of production that a company can achieve within a given period with the available resources.

Inputs

The resources, materials, and labor that are used in the production process to create goods and services.