Between 1975 and 1985, the Standard Deviation of the Returns

question 1

Multiple Choice

Between 1975 and 1985, the standard deviation of the returns for the NYSE and the S&P 500 indexes were 0.06 and 0.07, respectively, and the covariance of these index returns was 0.0008. What was the correlation coefficient between the two market indicators?

• A) .1525
• B) .1388
• C) .1458
• D) .1622
• E) .1064

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Definitions:

Efficiency

The ratio of the useful output of a system to the input, expressed in percentage, indicating the system's ability to convert energy or resources into output effectively.

Cooling

The process of removing excess heat from a system to maintain optimal operating conditions, often critical in electrical and electronic systems to prevent overheating.

Synchronoscope

An instrument used to determine the exact point at which two alternating currents achieve synchronism, often used in the synchronization of generators.

Voltage

The electrical potential difference between two points in a circuit, which drives current flow.