Stock M and Stock N Have Had the Following Returns

question 36

Multiple Choice

Stock M and Stock N have had the following returns for the past three years of -12%,
10%, 32%; and 15%, 6%, 24% respectively. Calculate the covariance between the two securities.

• A) -99
• B) +99
• C) +250
• D) None of the above

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Definitions:

Practical Intelligence

The ability to solve everyday problems through the use of experience-based knowledge, rather than theoretical reasoning.

Encoding

The process of transforming information into a format that can be stored in the brain; a crucial step in the process of creating new memories.

Mental Age

A measure of a person's intellectual development relative to people of their chronological age, indicating how far they have progressed in their cognitive abilities.

Cognitive Abilities

The mental capabilities that involve the acquisition, processing, retention, and application of information, such as memory, reasoning, attention, and problem-solving.