How Will the Returns on Two Assets React If Those

question 60

Multiple Choice

How will the returns on two assets react if those returns have a perfect positive correlation?
I. move in the same direction
II. move in opposite directions
III. move by the same amount
IV. move by either equal or unequal amounts

• A)I and III only
• B)I and IV only
• C)II and III only
• D)II and IV only
• E)III only