What is the most likely correlation coefficient between a stock index mutual fund and the S&P 500?
A) -1.0
B) 0.0
C) 1.0
D) 0.5

Question

Quizplus · Accepted Answer

The S&P 500 is a stock index that represents the performance of 500 large publicly traded companies in the United States. A stock index mutual fund is a type of mutual fund that invests in the stocks of companies in a particular stock index, such as the S&P 500. Therefore, there is a high positive correlation between a stock index mutual fund and the S&P 500, and the most likely correlation coefficient would be close to 1.0.

What Is the Most Likely Correlation Coefficient Between a Stock