Security a and Security B Have a Correlation Coefficient of -

question 1

Multiple Choice

Security A and Security B have a correlation coefficient of - 1.0.If Security A's return is expected to increase by 10 percent,

• A) Security B's return should also increase by 10 percent.
• B) Security B's return should decrease by 10 percent.
• C) Security B's return should be zero.
• D) Security B's return is impossible to determine from the above information.

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Definitions:

Demand Variance

The difference between the forecasted and actual demand for products or services, affecting inventory and production planning.

Bullwhip Measure

A metric used to quantify the increase in variability of order sizes in the supply chain from downstream to upstream.

Bullwhip Measure

A method or metric used to quantify the degree of the bullwhip effect within a supply chain.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, used in statistics to quantify the variance from the mean.