Busıness Fınance I Deneme Sınavı Sorusu #859453

The correlation always lies between _____ (perfect positive correlation) and _____ (perfect negative correlation).

Which of the following best completes the statement above?


+1 and -1

+1 and 0

0 and -1

+2 and -1

+2 and -2


Yanıt Açıklaması:

Since covariance is standardized by dividing by the standard deviations, the correlation always lies between +1 (perfect positive correlation) and -1 (perfect negative correlation). Zero correlation would mean there is no relation at all.

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