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Based on the outcomes in the following table, choose which of the statements below is (are) correct? Scenario Security A Security B Security C Recession
Based on the outcomes in the following table, choose which of the statements below is (are) correct?
Scenario | Security A | Security B | Security C |
Recession | Return > E(r) | Return = E(r) | Return < E(r) |
Normal | Return = E(r) | Return = E(r) | Return = E(r) |
Boom | Return < E(r) | Return = E(r) | Return > E(r) |
- The correlation coefficient between securities B and C is positive.
- The correlation coefficient between securities A and C is negative.
- The covariance of security A and security B is zero.
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