A Security Has a Zero Covariance with the Market

question 57

Multiple Choice

A security has a zero covariance with the market. This means that:

• A)the return on the security is always equal to that of the market.
• B)the return on the security moves in the same direction as the market return.
• C)the security is a risk-free security.
• D)there is no identifiable relationship between the return on the security and that of the market.
• E)the return on the security must vary more than that of the market.

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Definitions:

Sensory Memory

The shortest-term element of memory, which is the ability to retain impressions of sensory information after the original stimuli have ended.

Sperling

Best known for his research on the capacity and duration of human visual memory, particularly through his partial report technique.

Sensory Memory

The capacity to hold sensory information impressions briefly after the initial stimuli are gone, representing the most fleeting aspect of memory.

Proactive Interference

The phenomenon where old memories hinder the recall of newly acquired information.