The Term Corr $\varepsilon$ R $\varepsilon$ T) = 0 Tells Us That:
A)all Error Terms of Us

question 18

Multiple Choice

The term Corr( $\varepsilon$ R, $\varepsilon$ T) = 0 tells us that:

• A)all error terms of company R and T are 0.
• B)the unsystematic risk of companies R and T is unrelated or uncorrelated.
• C)the correlation between the returns of companies R and T is -1.
• D)the systematic risk of companies R and T is unrelated.
• E)None of the above.

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Definitions:

Condition Precedent

A contractual term that requires a specific event or action to occur before a contract becomes binding.

Prescribed Event

A specific occurrence or event that is outlined or defined within a legal or contractual context.

Merchant

An individual or business that sells goods or services in exchange for money.

Sale Of Goods Contract

An agreement between a buyer and a seller for the purchase and sale of specific goods.