Security X Has Expected Return of 14% and Standard Deviation

question 31

Multiple Choice

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

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Definitions:

Killifish

Small, often colorfully marked fish found living in fresh or brackish waters.

Cichlids

A diverse family of freshwater fish known for their vibrant colors and complex behaviors, often found in tropical regions.

Cohort

Group of individuals born during the same interval.

Survivorship Curve

Graph showing how many members of a cohort remain alive over time.