You have plotted the data for two securities over time on the same graph,i.e.,the month return of each security for the last 5 years.If the pattern of the movements of the two securities rose and fell as the other did,these two securities would have:
A)no correlation at all.
B)a weak negative correlation.
C)a strong positive correlation.
D)a strong negative correlation.
E)one can not get any idea of the correlation from a graph.

Question

Quizplus · Accepted Answer

The fact that the two securities rose and fell together indicates a strong positive correlation. When the movement of one security is directly related to the movement of the other, they are said to have a positive correlation. Therefore, option C, a strong positive correlation, is the best choice.

You Have Plotted the Data for Two Securities Over Time