Consider yourself a rational investor and you are evaluating what to include in your 2-stock portfolio. What will you most likely do? Invest in Meralco and SMC Power stocks because they are in the same industry and have shown a higher positive correlation of 0.80 which is good for diversification. Invest in SMC Power and Robinsons because they are negatively correlated. Invest in Robinsons Retail and BDO Unibank because regardless of the correlation coefficient, they both are, or are affiliated with companies in the same retail market. BDO is affiliated with SM Malls and Supermarket. Invest in BDO Unibank and Meralco because the BDO Unibank is a supporting industry to Meralco by providing loans. This is evidenced by a high positive correlation of 0.60. None of the above.

Consider yourself a rational investor and you are evaluating what to include in your 2-stock portfolio. What will you most likely do? Invest in Meralco and SMC Power stocks because they are in the same industry and have shown a higher positive correlation of 0.80 which is good for diversification. Invest in SMC Power and Robinsons because they are negatively correlated. Invest in Robinsons Retail and BDO Unibank because regardless of the correlation coefficient, they both are, or are affiliated with companies in the same retail market. BDO is affiliated with SM Malls and Supermarket. Invest in BDO Unibank and Meralco because the BDO Unibank is a supporting industry to Meralco by providing loans. This is evidenced by a high positive correlation of 0.60. None of the above.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter8: Liabilities And Stockholders' Equity

Section: Chapter Questions

Problem 8.7MBA: Stock split Using the data from E8-22. indicate the effects on ne assets and EPS of the stock spilt.

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