Consider the Following Probability Distribution for Stocks a and B

question 69

Multiple Choice

Consider the following probability distribution for stocks A and B: $\begin{array}{cccc}\text { State } & \text { Probability } & \text { Return on Stock A } & \text { Return on Stock B } \\1 & 0.15 & 8 \% & 8 \% \\2 & 0.20 & 13\% & 7\% \\3 & 0.15 & 12\%& 6\% \\4 & 0.30 & 14\%& 9\% \\5 & 0.20 & 16\% & 11 \%\end{array}$

The coefficient of correlation between A and B is

• A) 0.474.
• B) 0.612.
• C) 0.590.
• D) 1.206.

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Definitions:

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