The Variance of Stock a Is 0

question 21

Multiple Choice

The variance of Stock A is 0.005492,the variance of Stock B is 0.012394,and the covariance between the two is 0.0034.What is the correlation coefficient?

• A)0)4284
• B)0)3542
• C)0)4010
• D)0)4121
• E)0)3510

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Definitions:

Consolidated Retained Earnings

The total accumulated profits of a parent company and its subsidiaries after dividends are paid, as shown in consolidated financial statements.

Equity Method

An accounting practice where an investor records its proportional share of investee profits or losses, reflecting the changing value of its investment over time.

Consolidated Net Income

The total net income of a parent company and its subsidiaries after removing the effects of intercompany transactions.

Impairment

A reduction in the recoverable value of a fixed asset or goodwill below its carrying amount on the balance sheet.