If two securities are negatively correlated, their covariance is
A) positive
B) negative
C) zero
D) cannot be determined

Name: If two securities are negatively correlated, their covariance is A) positive B) negative C) zero D) cannot be determined
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Question

Quizplus · Accepted Answer

Covariance measures the directional relationship between two variables. If two securities are negatively correlated, their covariance will be negative, indicating that as one security's value increases, the other's tends to decrease.

If Two Securities Are Negatively Correlated, Their Covariance Is