The Possible Outcomes for the Returns on Stock X and the Returns

question 41

Multiple Choice

The possible outcomes for the returns on Stock X and the returns on the market portfolio have been estimated as follows: Each scenario is considered to be equally likely to occur.
-Refer to the information above. Calculate the covariance of the returns of Stock X and the market portfolio.

• A)12.2%%
• B)150.0%%
• C)61.7%%
• D)50.0%%

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Definitions:

Subsidence

The sinking or settling of the Earth's surface, often due to natural geological processes or human activities.

Uplift

A process that causes regions of the Earth's surface to rise due to structural changes in the Earth's crust or mantle.

Continental Crust

The thick, buoyant part of the Earth's crust that forms the continents, contrasted with the denser oceanic crust.

Thickness

The measurement from one surface of an object or material to the opposite surface.