What Is the Covariance of Security a to the Market

question 20

Multiple Choice

What is the covariance of security A to the market given the following information?

• A) 605.0
• B) 614.1
• C) 618.0
• D) 623.5
• E) 640.6

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Definitions:

Perpetuity

An annuity whose payments continue forever.

Compounded Monthly

A method of calculating interest where the interest earned each month is added to the principal, increasing the amount on which future interest is computed.

Purchase Agreement

A legal document outlining the terms and conditions of a purchase between a buyer and a seller.

Compounded Monthly

The process of adding interest to the principal sum of a loan or deposit, or compound interest, on a monthly basis.