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Suppose that a stock portfolio and a bond portfolio have a zero correlation. This means that Multiple Choice the covariance of the stock and bond portfolios will be positive O the returns on the stock and bond portfolios tend to vary independently of each other O the returns on the stock and bond portfolios tend to move inversely the returns on the stock and bond portfolios tend to move together

Suppose that a stock portfolio and a bond portfolio have a zero correlation. This means that Multiple Choice the covariance of the stock and bond portfolios will be positive O the returns on the stock and bond portfolios tend to vary independently of each other O the returns on the stock and bond portfolios tend to move inversely the returns on the stock and bond portfolios tend to move together

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Suppose that a stock portfolio and a bond portfolio have a zero correlation. This means that Multiple Choice O the covariance of the stock and bond portfolios will be positive O the returns on the stock and bond portfolios tend to vary independently of each other O O the returns on the stock and bond portfolios tend to move inversely the returns on the stock and bond portfolios tend to move together
Transcribed Image Text:Suppose that a stock portfolio and a bond portfolio have a zero correlation. This means that Multiple Choice O the covariance of the stock and bond portfolios will be positive O the returns on the stock and bond portfolios tend to vary independently of each other O O the returns on the stock and bond portfolios tend to move inversely the returns on the stock and bond portfolios tend to move together
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