A Negative Coefficient of Correlation Implies That

question 60

Multiple Choice

A negative coefficient of correlation implies that

• A) on average, returns to such assets are negative.
• B) asset returns tend to move in opposite directions.
• C) asset return tend to move in opposite directions.
• D) None of the above because the coefficient of correlation cannot be negative.

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Definitions:

Critically Examine

The process of thoughtfully analyzing and evaluating something in detail to understand its characteristics or insights.

Reliability

The degree to which an assessment tool, product, or system performs consistently and accurately over time.

Report's Findings

The conclusions or outcomes derived from an investigation, research, or analysis, typically summarized in a report.

Scientific Method

A systematic and logical approach to discovering how things in the universe work, involving observation, hypothesis formation, experimentation, and conclusion.