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Use the Information for the Question(s)below

Question 7

Multiple Choice

Use the information for the question(s) below.
Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share,200 shares of Lowes (LOW) at $30 per share,and 100 shares of Ball Corporation (BLL) at $40 per share.
-Which of the following equations is INCORRECT?


A) Cov(Ri,Rj) = Use the information for the question(s) below. Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share,200 shares of Lowes (LOW) at $30 per share,and 100 shares of Ball Corporation (BLL) at $40 per share. -Which of the following equations is INCORRECT? A) Cov(R<sub>i</sub>,R<sub>j</sub>) = Σ(R<sub>i</sub> - R<sub>i</sub>) (R<sub>j</sub> - R<sub>j</sub>) B) Var(R<sub>p</sub>) = x<sub>1</sub><sup>2</sup><sup>Var</sup>(R<sub>1</sub>) + x<sub>2</sub><sup>2</sup><sup>Var</sup>(R<sub>2</sub>) + 2X<sub>1</sub>X<sub>2</sub>Cov(R<sub>1</sub>,R<sub>2</sub>) C) Corr(R<sub>i</sub>,R<sub>j</sub>) = D) Cov(R<sub>i</sub>,R<sub>j</sub>) = E[(R<sub>i</sub> - E[R<sub>i</sub>]) (R<sub>j</sub> - E[R<sub>j</sub>]) ]
Σ(Ri - Ri) (Rj - Rj)
B) Var(Rp) = x12Var(R1) + x22Var(R2) + 2X1X2Cov(R1,R2)
C) Corr(Ri,Rj) = Use the information for the question(s) below. Suppose you invest $20,000 by purchasing 200 shares of Abbott Labs (ABT) at $50 per share,200 shares of Lowes (LOW) at $30 per share,and 100 shares of Ball Corporation (BLL) at $40 per share. -Which of the following equations is INCORRECT? A) Cov(R<sub>i</sub>,R<sub>j</sub>) = Σ(R<sub>i</sub> - R<sub>i</sub>) (R<sub>j</sub> - R<sub>j</sub>) B) Var(R<sub>p</sub>) = x<sub>1</sub><sup>2</sup><sup>Var</sup>(R<sub>1</sub>) + x<sub>2</sub><sup>2</sup><sup>Var</sup>(R<sub>2</sub>) + 2X<sub>1</sub>X<sub>2</sub>Cov(R<sub>1</sub>,R<sub>2</sub>) C) Corr(R<sub>i</sub>,R<sub>j</sub>) = D) Cov(R<sub>i</sub>,R<sub>j</sub>) = E[(R<sub>i</sub> - E[R<sub>i</sub>]) (R<sub>j</sub> - E[R<sub>j</sub>]) ]
D) Cov(Ri,Rj) = E[(Ri - E[Ri]) (Rj - E[Rj]) ]

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