n NISM Certifications
XXI NISM Series XXI-A
Medium

The correlation coefficient between the returns of two asset classes is 0.8. This means that:

Practice question from NISM XXI A for PMS - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Returns are positively and highly correlated

    Correct answer

  2. B

    Returns are perfectly positively correlated

  3. C

    Price change in one leads to an 80% change in the other

  4. D

    Returns are highly correlated but the direction is uncertain

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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