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Prove or disprove, using the formulas for Beta and Correlation, the following statement: A stock with a Beta equal to one is perfectly correlated with
Prove or disprove, using the formulas for Beta and Correlation, the following statement:
"A stock with a Beta equal to one is perfectly correlated with the market:
Hint: to prove a statement is true or fales, start with the formulas for each term, set them equal to each other, and see if it reduces down to an identity, that is, if A=A, then the statement is true, it not, it is false.
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