Question

1. When comparing two companies, a correlation coefficient of 0 means there is: A. Positive correlation...

1. When comparing two companies, a correlation coefficient of 0 means there is:

A.

Positive correlation
B.

Negative correlation
C.

No correlation
D.

Need more information

2. When comparing two companies, a correlation coefficient of +1 means there is:

A.

Positive correlation
B.

Negative correlation
C.

No correlation
D.

Need more information

3. Toyota Motor Corporation would like to increase revenue and decrease risk. It should merge with:

A.

Nissan Motor Company
B.

Ford Motor Company
C.

Google
D.

Honda Motor Company
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Homework Answers

Answer #2

Answer 1)

Correlation Coefficient 0 means there is no correlation between the two stocks.

Option C is correct.

Answer 2)

Correlation Coefficient +1 means there is positive correlation between the two stocks.

Option A is correct.

Answer 3)

When risk is required to be reduced then you diversify, here the Toyota Motors should diversify and should invest in a auto- mobile industry, That is Google.

Option C is correct.

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