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:

Willingness to Pay

The maximum amount an individual is prepared to spend on a good or service, reflecting its value to them.

Basketball Sneakers

Footwear specifically designed for playing basketball, offering support, durability, and traction.

Willingness to Pay

The maximum amount a consumer is ready to pay for a good or service, reflecting the value they place on it.

Basketball Sneakers

Specialized footwear designed to provide support, comfort, and performance improvements for the sport of basketball.