You have plotted the data for two securities over time on the same graph,i.e.,the month return of each security for the last 5 years.If the pattern of the movements of the two securities rose and fell as the other did,these two securities would have:
A)no correlation at all.
B)a weak negative correlation.
C)a strong negative correlation.
D)a strong positive correlation.
E)one can not get any idea of the correlation from a graph.

Question

Quizplus · Accepted Answer

When two securities rise and fall together, it suggests that they have a strong positive correlation. This means that when one security's return increases, the other security's return also tends to increase, and when one security's return decreases, the other security's return also tends to decrease.

You Have Plotted the Data for Two Securities Over Time