Exhibit 3A.1 \[\begin{array} { c c c } \text { Year } & \begin{array} { c } \text { Alpine's } \\ \text { Rate of Return } \end{array} & \begin{array} { c } \text { Tauber's } \\ \text { Rate of Return } \end{array} \\ \hline 1995 & 5 & 9 \\ 1996 & 9 & 16 \\ 1997 & 11 & - 16 \\ 1998 & - 10 & 12 \\ 1999 & 12 & 9 \end{array}\] -Refer to Exhibit 3A.1.Calculate the covariance.

A) -32.20 B) -23.32 C) 1.00 D) 23.32 E) 32.20 A) -32.20 B) -23.32 C) 1.00 D) 23.32 E) 32.20 A

Exhibit 3A.1 \[\begin{array} { c c c } \text { Year } & \begin{array} { c } \text { Alpine's } \\ \text { Rate of Return } \end{array} & \begin{array} { c } \text { Tauber's } \\ \text { Rate of Return } \end{array} \\ \hline 1995 & 5 & 9 \\ 1996 & 9 & 16 \\ 1997 & 11 & - 16 \\ 1998 & - 10 & 12 \\ 1999 & 12 & 9 \end{array}\] -Refer to Exhibit 3A.1.Calculate the coefficient of correlation.

A) -0.456 B) -0.354 C) 0.000 D) 0.456 E) 3.538 A) -0.456 B) -0.354 C) 0.000 D) 0.456 E) 3.538 B

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Business
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Analysis of Investments

Exam 28: Calculating Covariance and Correlation Coefficient of Assets

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Exhibit 3A.1 Year Alpine's Rate of Return Tauber's Rate of Return 1995 5 9 1996 9 16 1997 11 -16 1998 -10 12 1999 12 9 -Refer to Exhibit 3A.1.Calculate the covariance.

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What is the correlation coefficient for two assets with a covariance of .0032,if asset 1 has a standard deviation of 12 percent and asset 2 has a standard deviation of 9 percent?

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Exhibit 3A.1 Year Alpine's Rate of Return Tauber's Rate of Return 1995 5 9 1996 9 16 1997 11 -16 1998 -10 12 1999 12 9 -Refer to Exhibit 3A.1.Calculate the coefficient of correlation.

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