You plotted the monthly rate of return for two securities against time for the past 48 months.If the pattern of the movements of these two sets of returns rose and fell together the majority,but not all,of the time,then the securities have
A)no correlation at all.
B)a weak negative correlation.
C)a strong negative correlation.
D)a strong positive correlation.
E)a perfect positive correlation.

Question

Quizplus · Accepted Answer

If the two sets of returns moved together for the majority of the time, they have a positive correlation. Moreover, a strong positive correlation exists between them because they rose and fell together for most of the time.

You Plotted the Monthly Rate of Return for Two Securities