Question: High correlation does not mean that values of the two variables are the same. Investment reports often include correlations. Following a table of correlations among mutual funds, a report adds, “Two funds can have perfect correlation, yet different levels of risk. For example, Fund A and Fund B may be perfectly correlated, yet Fund A moves

20% whenever Fund B mover 10%. Write a brief explanation of how this can happen. Give an example to illustrate your explanation.