Which of the Following Equations Is INCORRECT

question 7

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) = x₁^2Var(R₁) + x₂^2Var(R₂) + 2X₁X₂Cov(R₁,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:

Banks Borrow

Banks borrow refers to the process by which banks take loans from other banks, financial institutions, or the central bank to maintain liquidity and meet their loan obligations to depositors.

Cash Reserves

Funds that a person or entity keeps on hand to meet short-term and emergency funding needs.

Medium of Exchange

An instrument or system used to facilitate the sale, purchase, or trade of goods and services between parties.

Currency

A medium of exchange that facilitates trade and is usually issued by a government as legal tender.