The Variance of the Rates of Return Is 0

question 120

Multiple Choice

The variance of the rates of return is 0.25 for stock X and 0.01 for stock Y. The covariance between the returns of X and Y is −0.01. The correlation of the rates of return between X and Y is ________.

• A) −0.25
• B) −0.20
• C) 0.20
• D) 0.25

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Definitions:

Customer Satisfaction

A state that is achieved when companies meet the needs and expectations customers have for their goods or services.

Long-Term Sales

Sales strategies focused on achieving sustained revenue growth over an extended period rather than immediate gains.

Needs

States of felt deprivation. Consumers feel that deprivation when they lack something useful or desirable like food, clothing, shelter, transportation, or safety.

Ethical Behavior

Acting in ways consistent with societal standards of right and good conduct, both in personal and professional contexts.