Two Assets Whose Returns Move in the Opposite Directions and Have

question 61

True/False

Two assets whose returns move in the opposite directions and have a correlation coefficient of -1 are both either risk-free assets or low-risk assets.

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Definitions:

Foreseeable Risk

A potential danger or issue that a reasonable person would anticipate in a given set of circumstances, often discussed in negligence and tort cases.

Compensatory Damages

Money awarded equivalent to the actual value of injuries or damages sustained by the aggrieved party.

Doctrine

A principle or body of principles presented for acceptance or belief, as by a religious, philosophical, scientific, or political group.

Liability

A legal responsibility or obligation, which can be civil or financial in nature.