Security X Has Expected Return of 14% and Standard Deviation

question 8

Multiple Choice

Security X has expected return of 14% and standard deviation of 22%. Security Y has expected return of 16% and standard deviation of 28%. If the two securities have a correlation coefficient of 0.8, what is their
Covariance?

• A) 0.038
• B) 0.049
• C) 0.018
• D) 0.013
• E) 0.054

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Definitions:

Physical Slowdown

A decrease in the speed or efficiency of bodily movements and functions, often due to aging, fatigue, or health issues.

Physical Exercise

Bodily activity that enhances or maintains physical fitness and overall health and wellness.

Memory

The cognitive function that allows us to encode, store, and retrieve information from the past.

Cognition

The process of obtaining information and grasping its meaning through intellectual engagement, personal experiences, and the use of our sensory organs.