Between 1989and 2009, the Standard Deviation of the Returns for the S&P/TSX

question 11

Multiple Choice

Between 1989and 2009, the standard deviation of the returns for the S&P/TSX and the DJIA indexes were 0.08 and 0.10, respectively, and the covariance of these index returns was 0.0007. What was the correlation coefficient between the two market indicators?

• A) .0906
• B) .0985
• C) .0796
• D) .0875
• E) .0654

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Definitions:

Federal Reserve

The central bank of the United States, responsible for setting monetary policy, regulating banks, and ensuring the stability of the financial system.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash and bank deposits.

Total Reserves

The sum of a bank's deposits held at the central bank and the cash physically held in the bank's vault.

Required Reserves

The minimum amount of reserves that a bank must hold as mandated by the central bank or regulatory authority, usually a percentage of the bank's deposit liabilities.