What Is the Covariance of Security a to the Market

question 47

Multiple Choice

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

• A) 505.0
• B) 514.1
• C) 517.5
• D) 523.5
• E) 540.6

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Definitions:

Slope

The measure of the steepness or incline of a line, defined as the ratio of the vertical change to the horizontal change between two points on the line.

API Gravity Degrees

A measure used in the petroleum industry that expresses the density of petroleum liquids relative to water; higher API gravity indicates a lighter oil.

Standardized Residuals

The differences between observed and predicted values, scaled by an estimate of standard deviation.

Covariances

A measure of the degree to which two variables change with respect to each other, indicating the direction of their linear relationship.