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The Covariance Between the Returns of a and B Is

Question 7

Multiple Choice

The covariance between the returns of A and B is -0.112. The standard deviation of the rates of return is 0.26 for stock A and 0.81 for stock B. The correlation of the rates of return between A and B is the closest to ________.


A) -1.88
B) -0.53
C) 0.53
D) 1.88

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