Two assets whose returns move in the opposite directions and have a correlation coefficient of -1 are both either risk-free assets or low-risk assets.

Question

Quizplus · Accepted Answer

Assets whose returns move in opposite directions and have a correlation coefficient of -1 are not necessarily risk-free or low-risk assets. They can be risky assets with different risk exposures, but whose returns move in opposite directions.

Two Assets Whose Returns Move in the Opposite Directions and Have