Security M Has Expected Return of 17% and Standard Deviation

question 60

Multiple Choice

Security M has expected return of 17% and standard deviation of 32%.Security S has expected return of 13% and standard deviation of 19%.If the two securities have a correlation coefficient of 0.78, what is their covariance

• A)0.038
• B)0.049
• C)0.047
• D)0.045
• E)0.054

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Definitions:

Gestalt Grouping

Principles in psychology that describe how humans naturally organize visual elements into groups or unified wholes.

Proximity

The physical or psychological closeness between people, objects, or ideas, often affecting perceptions and relations.

Stimulus

An external event or factor that induces a response or reaction in a biological organism.

Gestalt Grouping

Principles in psychology that explain how humans naturally organize visual elements into groups or unified wholes when certain principles are applied, such as similarity or proximity.