The Variance of the Rates of Return Is 0

question 120

Multiple Choice

The variance of the rates of return is 0.25 for stock X and 0.01 for stock Y. The covariance between the returns of X and Y is −0.01. The correlation of the rates of return between X and Y is ________.

• A) −0.25
• B) −0.20
• C) 0.20
• D) 0.25

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