What Is the Correlation Coefficient Between the Market Return and a Risk-Free

question 145

Multiple Choice

What is the correlation coefficient between the market return and a risk-free asset?

• A) +¥
• B) -¥
• C) +1
• D) -1
• E) Zero

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Definitions:

Transfer Payments

Payments made by governments to individuals without any corresponding service or good being provided in return.

Property Income

Income earned from the ownership of assets like land, real estate, or stocks, often taking the form of rent, dividends, or interest.

Transfer Payments

Payments made by the government to individuals or organizations without requiring the recipient to provide goods or services in return, such as welfare or subsidies.

Property Income

Earnings from property ownership, including rent, dividends, and interest.