Between 2000 and 2010, the Standard Deviation of the Returns

question 42

Multiple Choice

Between 2000 and 2010, the standard deviation of the returns for the TSX Venture and the S&P/TSX indexes were 0.27 and 0.14, respectively, and the covariance of these index returns was 0.03. What was the correlation coefficient between the two market indicators?

• A) 1.26
• B) 0.7937
• C) 0.2142
• D) 0.1111
• E) 0.44

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Definitions:

Utility

In economics, it refers to the total satisfaction received from consuming a good or service.

Consumption

The act of using goods and services for personal needs or wants, including the process by which these goods and services are acquired.

Satisfaction

The feeling of pleasure or fulfillment that comes from meeting a desire, expectation, or goal.

Marginal Utility

The additional satisfaction or benefit received by consuming one more unit of a good or service.