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

---

Definitions:

Exam

A formal test of a person's knowledge or proficiency in a subject or skill.

Meat

The flesh of animals as used for food.

Post Hoc

short for 'Post Hoc Ergo Propter Hoc', a logical fallacy where one assumes that since event Y followed event X, event X must have caused event Y.

Fallacy

A reasoning error that leads to a flawed argument.