A Risky Security Has a Variance of

question 9

Multiple Choice

A risky security has a variance of .023983 and a covariance with the market of .0323. The variance of the market is .01839. What is the correlation of the risky security to the market?

• A)1.54
• B)1.65
• C)1.72
• D)1.83
• E)1.85

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Definitions:

Irrational

Thinking or behavior that is not based on sound reasoning, logic, or factual evidence.

Cultural Difference

Variations in practices, beliefs, and values among people from different cultural backgrounds.

National Character

The idea that people in different cultures have different personalities.

Conscientiousness

A personality trait characterized by diligence, carefulness, thoroughness, and a desire to do a task well.