Stocks A and B have a correlation of +1.If stock A went from $10 to $12 over the past month,what is the price of stock B,if its price one month ago was $5?
A) $5
B) $4
C) $6
D) Cannot be determined

Question

Quizplus · Accepted Answer

Since stocks A and B have a correlation of +1, it means that they move in the same direction. Therefore, if stock A went up from $10 to $12, we can assume that stock B also went up by the same percentage, from $5 to $6. Thus, the answer is C.

Stocks a and B Have a Correlation of +1