Question
Which of the following statements about the correlation coefficient is correct? 1. Positive correlation coefficients imply that the returns on security A tend to
Which of the following statements about the correlation coefficient is correct? 1. Positive correlation coefficients imply that the returns on security A tend to move in the same direction as those on security B II. A correlation coefficient of 0.7 implies that if the returns on security A increase by 10%, the returns on security B will increase by 7% III. A correlation coefficient of 0 implies that if the returns on security A increase by 10%, the returns on security B will stay stable O a. I and III are correct O b. Only I is correct O c. All statements are correct Od. II and III are correct Oe. I and II are correct
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