Which of the following statements about the correlation coefficient is correct? I. 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 d. II and III are correct e. I and II are correct

MATLAB: An Introduction with Applications
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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.
Transcribed Image Text: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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