The Covariance of Two Variables X and Y

question 163

Multiple Choice

The covariance of two variables X and Y:

• A)must be between -1 and +1.
• B)must be positive.
• C)can be positive or negative.
• D)must be less than +1.

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Definitions:

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting.

Capital Rationing

A strategic financial approach where a company restricts its spending on new projects due to limited resources.

Net Present Value

A performance indicator for assessing an investment's profit, derived by taking away the current value of cash disbursements from the current value of cash incomes during a specific period.

Capital Expenditure

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.