True\False Questions

4- The covariance between two variables is between +1 and -

5- An effective interest rate is capitalized only once per period, while a nominal interest rate can be capitalized several times per period.

6- In the case of discounting cash flows that grow at a constant rate (g) in perpetuity, the growth rate (g) must be lower than the discount rate (r).

7- The variance of a portfolio composed of two securities peaks at a zero correlation rate between the two securities.