The Correlation Coefficient Between the Efficient Portfolio and the Risk-Free

question 35

Multiple Choice

The correlation coefficient between the efficient portfolio and the risk-free asset is

• A)+1.0.
• B)-1.0.
• C)0.0.
• D)Further information is needed.

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Definitions:

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like rent, salaries, and insurance fees.

High-low Method

A technique in cost accounting used to estimate fixed and variable costs by analyzing the highest and lowest levels of activity and their respective costs.

Variable Cost Per Unit

The cost that varies with the level of output or production, calculated on a per-unit basis.

Fixed Costs

Expenses that remain constant for a business regardless of the level of production or sales volume.