The Correlation Between Stocks a and B Is Computed as The

question 19

Multiple Choice

The correlation between Stocks A and B is computed as the:

• A)covariance between A and B divided by the standard deviation of A times the standard deviation of B.
• B)standard deviation of A divided by the standard deviation of B.
• C)standard deviation of AB divided by the covariance between A and B.
• D)variance of A plus the variance of B divided by the covariance of AB.
• E)square root of the covariance of AB.

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Definitions:

Normal Balance

The part of an account, whether debit or credit, that is used to log increases in the account's value.

Account Nature

Refers to the classification of an account as either an asset, liability, equity, revenue, or expense.

Recorded Voucher

A documented voucher that has been entered into a financial accounting system.

Periodic Inventory Method

An accounting method that calculates the cost of goods sold and ending inventory levels at the end of an accounting period by conducting a physical count.