Between 1980 and 1990, the Standard Deviation of the Returns

question 30

Multiple Choice

Between 1980 and 1990, the standard deviation of the returns for the NIKKEI and the DJIA indexes were 0.19 and 0.06, respectively, and the covariance of these index returns was 0.0014. What was the correlation coefficient between the two market indicators?

• A) 8.1428
• B) 0.0233
• C) 0.0073
• D) 0.2514
• E) 0.1228

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Definitions:

Partners' Capital Statement

A financial statement that shows the changes in each partner’s equity in the business over a specific period of time.

Drawings

Withdrawals of cash or other assets from a business by the owner for personal use.

Capital Statement

A financial statement that outlines the changes in owners' equity over a specific period.

Drawings

Withdrawals made by an owner from the business for personal use, reducing the capital account of the owner.