Which of the following statements is correct?
A) Stocks and long-term Treasury bonds are highly positively correlated.
B) Stocks and Treasury bills are highly positively correlated.
C) Stocks, long-term Treasury bonds, and Treasury bills are all highly correlated.
D) None of the statements are correct.

Question

Quizplus · Accepted Answer

None of the statements are correct. Stocks and long-term Treasury bonds are typically negatively correlated, meaning they move in opposite directions. Stocks and Treasury bills are not highly positively correlated, as they are different types of investments with different risk profiles. While all three asset classes may experience some correlation at times, they are not consistently highly correlated.

Which of the Following Statements Is Correct