Question
Asked Mar 10, 2020
2 views

The correlation coefficient between the returns on a broad index of U.S. stocks and the returns on indexes of the stocks of other industrialized countries is mostly _____, and the correlation coefficient between the returns on various diversified portfolios of U.S. stocks is mostly _____.
a. less than .8; greater than .8.
b. greater than .8; less than .8.
c. less than 0; greater than 0.
d. greater than 0; less than 0.

check_circle

Expert Answer

Step 1

The correlation coefficient between the returns on a U.S. stocks broad index and stocks indexes return of the other countries which are industrialized is generally less than .8 and the correlatio...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.

Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Perpetuities A local bank will pay you $100 a year for your lidetime if you deposit $2,500 in the ba...

A: The computation of interest rate is as follows: In case of perpetual cash flow:  

question_answer

Q: Lanni Products is a start-up computer software development firm. It currently owns computer equipmen...

A: The asset is an item that possesses some value that can be used to pay off any debts or commitments....

question_answer

Q: Assume that today you purchased a Treasury Note with the following characteristics:   Par (face) va...

A: Interest rate risk is the risk on the bonds arises as a result of changes in the interest rates. The...

question_answer

Q: Andre is an amateur investor who holds a small portfolio consisting of only four stocks. The stock h...

A: Click to see the answer

question_answer

Q: Two bonds have identical times to maturity and coupon rates. One is callable at 105, the other at 11...

A: Callable bond is the bond used to raise funds from the debt source of financing and carry a right fo...

question_answer

Q: Suppose you find that prices of stocks before large dividend increases show on average consistently ...

A: Efficient market hypothesis: The efficient market hypothesis is a kind of hypothesis in which the pr...

question_answer

Q: Greta, an elderly investor, has a degree of risk aversion of A = 3 when applied to return on wealth ...

A: Portfolio-1: S&P 500 Risk Premium = 5% Time Horizon (t) = 1 Year   The calculation of the estima...

question_answer

Q: Institutional Advisors for All Inc., or IAAI, is a consulting firm that primarily advises all types ...

A: The economic series which tends to rise or fall in advance as compared to other economic trends are ...

question_answer

Q: ) Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at...

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts f...