Security X Has Expected Return of 7% and Standard Deviation

question 24

Multiple Choice

Security X has expected return of 7% and standard deviation of 14%.Security Y has expected return of 11% and standard deviation of 22%.If the two securities have a correlation coefficient of -0.45, what is their covariance?

• A)0.0388
• B)-0.0108
• C)0.0184
• D)-0.0139

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Definitions:

National Quality Award

An accolade given to companies that exhibit outstanding quality management and operational excellence.

Malcolm Baldrige Foundation

A foundation that supports the Malcolm Baldrige National Quality Award, which recognizes U.S. organizations for their achievements in quality and performance.

U.S. Congress

The bicameral legislative body of the federal government of the United States, consisting of two houses: the Senate and the House of Representatives.

Period Costs

Expenses that are incurred on the income statement in the period in which they are incurred, such as selling, general, and administrative expenses, which are not directly tied to the production of goods.