You Have Plotted the Data for Two Securities Over Time

question 55

Multiple Choice

You have plotted the data for two securities over time on the same graph, ie., the month return of each security for the last 5 years. If the pattern of the movements of the two securities rose and fell as the other did, these two securities would have:

• A) no correlation at all.
• B) a weak negative correlation.
• C) a strong negative correlation.
• D) a strong positive correlation.

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Definitions:

John B. Watson

An American psychologist who is considered one of the founders of behaviorism, emphasizing the study of observable behavior.

Mental Processes

Internal, subjective experiences we infer from behavior, including thoughts, beliefs, and emotions.

CS

In learning psychology, CS stands for Conditioned Stimulus, an initially neutral stimulus that, after being associated with an unconditioned stimulus, eventually triggers a conditioned response.

Conscious Intentions

Mental states or plans that are formed with awareness and purpose towards carrying out an action.