Two Assets Whose Returns Move in the Same Direction and Have

question 167

True/False

Two assets whose returns move in the same direction and have a correlation coefficient of +1 are very risky assets.

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Definitions:

Fixed Assets

Long-term tangible assets that a company owns and uses in its operations to generate income, not expected to be converted into cash within a year.

Long-Term Assets

Assets owned by a company that have a useful life of more than one year, such as property, plant, and equipment.

Current Assets

Current assets are assets that are expected to be converted into cash, sold or consumed within a year or within the normal operating cycle of the business, such as cash, inventory, and receivables.

Installation

refers to the process of setting up and configuring equipment or software to make it ready for use.