If the Returns of Two Stocks Are Perfectly Correlated, Then

question 68

Multiple Choice

If the returns of two stocks are perfectly correlated, then

• A)their betas should each equal 1.0.
• B)the sum of their betas should equal 1.0.
• C)their correlation coefficient should equal 1.0.
• D)their portfolio standard deviation should equal 1.0.

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Definitions:

Axial Skeleton

The segment of the skeletal system that is made up of the head and trunk bones, encompassing the skull, spine, ribs, and sternum.

Vertebral Column

A series of connected bones called vertebrae that form the backbone, providing support and protecting the spinal cord.

Cervical Vertebra

One of the seven vertebrae in the human neck, forming the upper part of the spinal column.

Rib Facets

The small, flat surfaces on vertebrae for articulation with the ribs.