Covariance Measures the Interrelationship Between Two Securities in Terms Of

question 2

Multiple Choice

Covariance measures the interrelationship between two securities in terms of:

• A) both expected return and direction of return movement.
• B) both size and direction of return movement.
• C) the standard deviation of returns.
• D) both expected return and size of return movements.
• E) the correlations of returns.

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Definitions:

Perceptual Ambiguity

A situation in which a visual stimulus lacks a clear interpretation due to conflicting perceptions or because it can be seen in more than one way.

Pointillism

An art technique where small, distinct dots of color are applied in patterns to form an image, associated with post-Impressionist painters.

Cubism

An early 20th-century art movement marked by the use of geometric shapes and a viewpoint that represents subjects from multiple perspectives.

Gestalt Continuity

A principle in Gestalt psychology that suggests humans naturally perceive objects as organized patterns and unified wholes rather than as separate components.