Assuming That Other Factors Are Constant,a Correlation of R =

question 16

True/False

Assuming that other factors are constant,a correlation of r = 0.95 will result in more accurate predictions than a correlation of r = +0.70.​

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Definitions:

Abnormal Return

The difference between an investment's actual return and its expected return based on the market or a benchmark's performance.

Economic Return

The total financial gain or loss on an investment or business venture, considering both cash flows and changes in market value.

Market Movements

Fluctuations in the prices of securities within financial markets, influenced by various factors including economic indicators, market sentiment, and political events.

P/E Ratios

The price-to-earnings ratio, a valuation metric comparing the current share price of a company to its per-share earnings.