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Security X Has Expected Return of 12% and Standard Deviation

Question 43

Multiple Choice

Security X has expected return of 12% and standard deviation of 18%. Security Y has expected return of 15% and standard deviation of 26%. If the two securities have a correlation coefficient of 0.7, what is their covariance?


A) 0.038
B) 0.070
C) 0.018
D) 0.033
E) 0.054

Correct Answer:

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