If There Is Positive Correlation Between Two Sets of Numbers

question 37

Multiple Choice

If there is positive correlation between two sets of numbers, then _______.

• A)r = 0
• B)r < 0
• C)r > 0
• D)SSE=1
• E)MSE = 1

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Definitions:

Yield To Maturity

The total expected return on a bond if held until its maturity date, expressed as an annual rate.

Coupon Rate

The annual interest rate paid by a bond relative to its face value, expressed as a percentage.

Duration-based Immunization

A strategy used in portfolio management to minimize the risk of interest rate fluctuations by matching the duration of assets and liabilities.

Rebalanced

The process of realigning the weightings of a portfolio of assets to maintain an original or desired level of asset allocation or risk.