1. If the returns of two stocks are perfectly correlated, then
their betas should each equal 1.0.
the sum of their betas should equal 1.0.
their correlation coefficient should equal 1.0.
their portfolio standard deviation should equal 1.0.
2. A times interest earned ratio of 5 indicates the firm:
A) Pays 5 times its earnings in interest expense
B) Earns significantly more than its interest obligations
C) Has interest expense equal to 5% of EBIT
D) Has a low tax liability