Use the following information, which describes the expected return and standard deviation for three different assets, to answer the following question(s).

-A negative coefficient of correlation implies that [blank].
A)on average, returns to such assets are negative
B)asset returns tend to move in opposite directions
C)asset returns tend to move in the same directions
D)there is a perfect relationship between returns earned

Question

Use the following information, which describes the expected return and standard deviation for three different assets, to answer the following question(s).
 
-A negative coefficient of correlation implies that [blank].
A)on average, returns to such assets are negative 
B)asset returns tend to move in opposite directions 
C)asset returns tend to move in the same directions 
D)there is a perfect relationship between returns earned

Quizplus · Accepted Answer

A negative coefficient of correlation implies that asset returns tend to move in opposite directions. It means that when one asset's return increases, the other asset's return decreases, and vice versa.

Use the Following Information, Which Describes the Expected Return and Standard