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- A portfolio is created by investing equally into two stocks: Stock A and Stock B. The table below provides the volatility of each stock as well as the correlation between the stock's return and the return of the portfolio. Find the correlation between the returns of these two stocks. Stock A Stock B Volatility 0.49 0.36 Correlation with Portfolio Return 0.71 0.30Which of the following is true about the correlation coefficient? A) It ranges from 0 to 1. B) It indicates the strength and direction of a linear relationship between two variables. C) It can be greater than 1. D) It is used to measure the central tendency of data.As a result of the research, it was concluded that there is no relationship between the two variables. What is the value of the correlation coefficient?A) 0,0B) 0,75C) 0,25D) 0,50
- Below is a set of data from a sample of n = 11: X 3 6 10 12 4 9 15 18 7 5 8Y 9 18 30 36 12 27 45 54 21 15 24 Answer the following questions:(a) Calculate the covariance.(b) Calculate the coefficient of correlation.(c) What conclusions can you reach about the relationship between X and Y? Explain.x y 10 8.04 8 6.95 13 7.58 9 8.81 11 8.33 14 9.96 6 7.23 4 4.26 12 10.84 6) The value of the correlation coefficient is: A) 0.633 B) 0.795 C) 1.266 D) -0.633According to the information given below, compute the correlation coefficient and the covariance coefficient between stock A and stock B. Standard deviation of the portfolio (stock A and stock B) : 0.37 Standard deviation of the stock A : 0.38 Standard deviation of the stock B : 0.43 Weight for stock A : 0.60 Weight for stock B : 0.40