Question 18 Suppose that stock A and stock B have a correlation of...
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Finance
Question 18
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Suppose that stock A and stock B have a correlation of 1. This means that ______.
the returns of the two stocks tend to move closely with each other to the extent the two stocks behave like the same stock
the returns of the two stocks tend to move together but each return can also have some movements that are independent of the other return
the returns on the two stocks tend to vary independently of each other
the returns of the two stocks tend to move inversely
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