If two investments are perfectly positively correlated, it means:
A) they have a correlation coefficient of zero.
B) they have a correlation coefficient of - 1.
C) they change values proportionately in the same direction at the same time.
D) their values will change inversely to each other.

Question

Quizplus · Accepted Answer

When two investments are perfectly positively correlated, it means they move in the same direction at the same time and in the same proportion, which is described by option C. A correlation coefficient of +1 indicates perfect positive correlation.

If Two Investments Are Perfectly Positively Correlated, It Means