Calculate the Appropriate Correlation Coefficient for the Following Data

question 23

Multiple Choice

Calculate the appropriate correlation coefficient for the following data.

• A)-0.97
• B)-0.39
• C)+0.11
• D)+0.57

---

Definitions:

Out-Of-The-Money Call

An options contract where the market price of the underlying asset is below the strike price, rendering it unprofitable to exercise.

Nonsystematic Variance

The portion of an asset's total variance that is attributable to company-specific or industry-specific factors and can be mitigated through diversification.

Market Index

A hypothetical portfolio of investment holdings which represents a segment of the financial market, used as a benchmark to measure the performance of investments.