If the covariance between the returns on two assets is equal to zero, then the correlation coefficient must also be zero.

Name: If the covariance between the returns on two assets is equal to zero, then the correlation coefficient must also be zero.
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Quizplus · Accepted Answer

This statement is true. The correlation coefficient between two assets is equal to their covariance divided by the product of their standard deviations. If the covariance is zero, then the numerator is zero, resulting in a correlation coefficient of zero.

If the Covariance Between the Returns on Two Assets Is