Assets C and H are perfectly negatively correlated. This means that as Asset C’s returns increased by 3% from January to February and decreased by 5% from February to March, then:
The returns of Asset H decreased by 3% from January to February and increased by 5% from February to March.
The returns of Asset H exhibited the same pattern.
The returns of Asset H decreased by 5% from January to February and increased by 3% from February to March.
The returns of Asset H exhibited no discernible pattern with those of Asset C.
2. According to research in the area of behavioral finance, the average risk averse investor perceives his or her gains and losses differently; that is, the utility derived from a $1,000 gain is not equal to the disutility associated with a $1,000 loss. According to this research, risk averse investors dislike or fear losses more than they enjoy gains.
False
True