Which of the following is a correct description of how the returns on assets co-move?A. Positive and negative deviations between assets at dissimilar times give a negative covariance.O B. Positive and negative deviations between assets at similar times give a negative covarianceOC. Positive and negative deviations between assets at dissimilar times give a positive covariance,O D. Positive and negative deviations between assets give a zero covariance.

Convergence means the movement of price of future contract towards spot price. The two price must…

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how the returns on assets co-move?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 5Q

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Question

Which of the following is a correct description of how the returns on assets co-move?
A. Positive and negative deviations between assets at dissimilar times give a negative covariance.
O B. Positive and negative deviations between assets at similar times give a negative covariance
OC. Positive and negative deviations between assets at dissimilar times give a positive covariance,
O D. Positive and negative deviations between assets give a zero covariance.

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