The Correlation Coefficient Between Two Assets Is Equal to ________

question 41

Multiple Choice

The correlation coefficient between two assets is equal to ________.

• A)their covariance divided by the product of their variances
• B)the product of their variances divided by their covariance
• C)the sum of their expected returns divided by their covariance
• D)their covariance divided by the product of their standard deviations

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Definitions:

Current Ratio

Measures a company's ability to pay short-term obligations with its short-term assets.

Market Ratio

A financial ratio used to evaluate the performance, value, and profitability of a company within the marketplace.

Book Ratio

A financial ratio that compares a company's book value to some other indicator, often used in the context of a price-to-book ratio.

Inventory Turnover

A financial ratio indicating how many times a company has sold and replaced inventory over a period.