Table 8.1 -The Correlation of Returns Between Asset a and Asset B

question 34

Multiple Choice

Table 8.1
-The correlation of returns between Asset A and Asset B can be characterized as ________. (See Table 8.1)

• A) perfectly positively correlated
• B) perfectly negatively correlated
• C) uncorrelated
• D) cannot be determined

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Definitions:

Investors

Individuals or entities that allocate capital with the expectation of receiving financial returns.

Board of Directors

Members selected by the corporation's shareholders to govern and decide on important matters concerning the company's administration.

Chief Executive Officer

The highest-ranking executive in a company, responsible for making major corporate decisions, managing overall operations, and acting as the main point of communication between the board of directors and corporate operations.

Corporation

A legal entity that is separate and distinct from its owners, capable of conducting business, owning property, and being liable for legal actions.