Which of the Following Equations Is INCORRECT

question 23

Multiple Choice

Which of the following equations is INCORRECT?

• A)Cov(R_i,R_j)= Σ(R_i - R_i)(R_j - R_j)
• B)Var(R_p)= w₁^2SD(R₁)+ w₂^2SD(R₂)+ 2w₁w₂Corr(R₁,R₂)SD(R₁)SD(R₂)
• C)Corr(R_i,R_j)=
• D)Cov(R_i,R_j)= E[(R_i - E[R_i])(R_j - E[R_j])]

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Definitions:

Short-term Investments

Short-term investments are financial assets that a company plans to convert into cash typically within a year, such as stocks or government bonds.

Payout Ratio

The percentage of earnings paid to shareholders in dividends, indicating how much money a company returns to its shareholders versus how much it retains for growth.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenue.

Dividends

Payments made by a corporation to its shareholder members, typically out of the company's profits.