Security X has expected return of 14% and standard deviation of 22%. Security Y has expected return of 16% and standard deviation of 28%. If the two securities have a correlation coefficient of 0.8, what is their covariance?
A. 0.038
B. 0.049
C. 0.018
D. 0.013
E. 0.054
B. 0.049
Cov(r X, r Y) = (0.8)(0.22)(0.28) = 0.04928.
You might also like to view...
A continuous loss:
a. Occurs evenly throughout the production process. b. Occurs unevenly throughout a process. c. Always occurs at the same place in the production process. d. Never occurs during the production process.
A common use of managerial contingency funds would be for:
A) Office supplies. B) Management consulting fees. C) A sudden increase in the price of unleaded gasoline. D) An "act of God."
Stacy told several people at a coffee shop that Pat, a real estate sales agent, was a thief and unfit for her profession. Pat sued for_________, claiming damages even though she could identify none. Stacy's defense would be_________
Fill in the blank(s) with correct word
You have placed an antique sofa up for auction, and the auctioneer has not made any special announcements about the sale. You can withdraw the sofa at any time before the auctioneer closes the sale by announcement or by the fall of the hammer.
Answer the following statement true (T) or false (F)