Exhibit 14-1

question 45

Multiple Choice

Exhibit 14-1.Over the past 30 years,the sample standard deviations of the rates of return for stock X and Stock Y were 0.20 and 0.12,respectively.The sample covariance between the returns of X and Y is 0.0096. Refer to Exhibit 14-1.The correlation of the rates of return between X and Y is closest to:

• A)0.20
• B)0.24
• C)0.36
• D)0.40

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Definitions:

Apparent Authority

The seeming authority that a principal has granted to an agent, leading a third party to reasonably believe the agent has such power.

Actual Authority

The express or implied power granted by a principal to an agent to act on the principal’s behalf.

Borg

A fictional collective from the "Star Trek" universe that assimilates species and technologies to achieve perfection.

Crater

A bowl-shaped cavity on the surface of a planet, moon, or asteroid, typically caused by the impact of a meteorite.