Assets with zero covariance have yields that are
A) inversely related.
B) positively correlated.
C) negatively correlated.
D) independent.

Question

Quizplus · Accepted Answer

Assets with zero covariance are independent, meaning that changes in the yield of one asset have no impact on the yield of the other asset. Therefore, their yields are not correlated, neither positively nor negatively, and are independent of each other.

Assets with Zero Covariance Have Yields That Are