Two Securities Have a Covariance of 0

question 26

Multiple Choice

Two securities have a covariance of 0.092. If their respective standard deviations are 23% and 31%, what is their correlation coefficient?

• A) 0.32
• B) 0.45
• C) 0.78
• D) 0.82
• E) 0.95

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Definitions:

MBO System

Management by Objectives; a strategic management model where goals are defined for each employee and their performance is assessed based on those predefined objectives.

Graphics Rating Scale

A performance appraisal method using a scale to visually represent employee performance levels across various categories.

Neutralization

A theory suggesting individuals justify immoral actions by denying responsibility or harm, thereby neutralizing guilt or disapproval.

Maturation

The developmental process where an individual matures or reaches full functionality, often referring to physical, mental, or emotional development.