Which of the following statements about the correlation coefficient is false? A) The values range between -1 to +1. B) A value of +1 implies that the returns for the two stocks move together in a completely linear manner. C) A value of -1 implies that the returns move in a completely opposite direction. D) A value of zero means that the returns are independent. E) None of the above (that is, all statements are true)

Question

Quizplus · Accepted Answer

A value of zero means that there is no linear relationship between the returns, but it does not imply independence.

Which of the Following Statements About the Correlation Coefficient Is