Given the Information in the Accompanying Table, Calculate the Correlation

question 5

Multiple Choice

Given the information in the accompanying table, calculate the correlation coefficient between the returns on Stocks A and B.

• A) -0.212
• B) -0.167
• C) 0.167
• D) 0.212

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Definitions:

Skewed

Describes a distribution that is asymmetrical, where data points cluster more on one side than the other, often leading to a longer tail on one side of the peak.

Mean

To find the average value of a group of numbers, one adds together all the numbers and divides by how many numbers there are.

Skewed

Describes a distribution of data that is asymmetrical, where a tail of the distribution is longer or fatter on one side than on the other.

Overall Average

The mean value calculated from the sum of all elements in a dataset divided by the total number of elements.