Which of the Following Formula Is Used to Compute Covariance $\operatorname{cov}(\mathrm{X}, \mathrm{Y})=\frac{\sum_{i=1}^{N}\left(x_{i}-\mu_{x}\right)\left(y_{i}-\mu_{y}\right)}{N}$

question 2

Multiple Choice

Which of the following formula is used to compute covariance between two variables X and Y?

• A) \( \operatorname{cov}(\mathrm{X}, \mathrm{Y})=\frac{\sum_{i=1}^{N}\left(x_{i}-\mu_{x}\right)\left(y_{i}-\mu_{y}\right)}{N} \)
• B) \( \operatorname{cov}(\mathrm{X}, \mathrm{Y})=\frac{\sum_{i=1}^{N}\left(x_{i}-\mu_{x}\right)^{2}}{N} \)
• C)\( \operatorname{cov}(\mathrm{X}, \mathrm{Y})=\sum_{i=1}^{N} \frac{\left(x_{i}-\mu_{x}\right)^{2}}{y_{i}-\mu_{y}} \)
• D) \( \operatorname{cov}(\mathrm{X}, \mathrm{Y})=\sqrt{\frac{\sum_{i=1}^{N}\left(x_{i}-\mu_{x}\right)^{2}}{N^{2}}} \)

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Definitions:

FIFO Cost Flow

An inventory valuation method where the cost of the oldest inventory items are the first to be recorded as sold.

Income Taxes

Taxes imposed by government authorities on individuals or entities' income and business profits.

Ending Inventory Value

The total value of all inventory items in stock at the end of an accounting period.

Dollar-Value LIFO

An inventory valuation method that uses the last-in, first-out principle, adjusted for changes in the dollar value, to account for inflation.