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Suppose that a stock portfolio and a bond portfolio have a correlation coefficient of .2 (=20%). This means that if the stock portfolio goes down
Suppose that a stock portfolio and a bond portfolio have a correlation coefficient of .2 (=20%). This means that if the stock portfolio goes down 1% on a given day, in expectation ______.
the bond portfolio goes down a lot (big negative returns). | ||
the bond portfolio weakly goes down (small negative returns). | ||
the bond portfolio goes up a lot (big positive returns). | ||
the bond portfolio weakly goes up (small positive returns). |
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