Which of the following statement is true of a covariance matrix?  a. The diagonal values are volatilities b. The non-diagonal values are covariances c. The non-diagonal values are coefficients of variations d. none of the above

Q: Using a wrong formula for CAPM is a __  (select one) a. Erronous model risk b. Market data…

A: Introduction : In simple word, the capital asset pricing model (CAPM) is the valuation model used to…

Q: Which of the following is false of the historical VaR?  a. It is based on normal distribution of…

A: Ans. Historical VaR do makes use of Monte Carlo Simulation.

Q: Can you provide a manual written working of calculating covariance with MP?  I am very much still…

A: Formula for covariance is: Covariance(XY)=∑P*(X-X) *(Y-Y) Where P=Probability X⇀ = Average of the…

Q: ROE can be disaggregated into operating and nonoperating returns. Nonoperating return will be…

A: ROE stands for "Return on Equity" it's a financial metric that measures the profitability of a…

Q: Select one: O a. specifically what will most likely happen O b. what definitely won't happen O c…

A: Standard deviation tells the range of values wherein our dataset will fall. It is also used in…

Q: Which of the following is not a characteristic of the normal distribution? Equal probabilities at…

A: In understanding the characteristics of a normal distribution, we need to examine each given option…

Q: What is the put-call ratio? What is it used for? What are considered high and low values and what do…

A: The question is based on the concept for indicators of the stock market performance. The Put-Call…

Q: If two returns are positively related to each other, they will have a ________, and if they are…

A: Covariance: calculates the directional relationship between two variables.

Q: q4-  What can be used to analyse the relationship between two categorical or qualitative variables?…

A: A scatter plot is a graphical representation that uses dots to represent values for two different…

Q: the range of values that correlation coefficients can take is only -1 to 1. True or false

A: The correlation coefficient is a statistical measure of the strength of a linear relationship…

Q: In a regression analysis, the variable that is being predicted is the a. Intervening variable O b.…

A: The variable that is attempted to clarify or anticipate is known as the the response variable,…

Q: The efficient frontier measures risk by using: Group of answer choices B. Correlation A. Risk-free…

A: Efficient frontier refers to the graphical representation of the set of optimal portfolios…

Q: IRR is the rate at which; a.NPV is zero b.NPV is negative c.IRR = NPV d.NPV is positive

A: IRR(Internal rate of return) is the rate which equates present value of cash inflows to the present…

Q: Which of the following is true?     PMT will either match PV or FV but NOT BOTH     PMT, PV, and…

A: PMT = PMT(Payment) is a fixed payment amount made at regular intervals as part of a financial…

Q: Consider the generalised linear regression model: y = Xẞ + e, with E[e] = 0 and E[ee] = 022. Let the…

A: The objective of the question is to identify the incorrect statements about the OLS and GLS…

Q: 0sw<4 4Sw<5 W

A: Given that a random variable W has probability density function g(W), defined as follows:

Q: What is the difference between covariance and correlation?

A: Co-variance: A co-variance is nothing but a descriptive measure of linear interaction intensity…

Q: 3. Find the margin of error for the given values of​ c, s, and n.   c=0.99​, s=5​, n=22 The margin…

A: Margin of error shows the quantum of random sampling error which is calculated by statistics in the…

Q: The value of a correlation is reported to be r = 0.25. How is this interpreted?

A: Correlation: In the financial and investing sectors, correlation is a statistic that indicates the…

Q: What is the fundamental theorem of calculus? A. It states that every continuous function is…

A: The fundamental theorem of calculus is a theorem that links the concept of differentiating a…

Q: When we use Excel to perform a regression analysis, the independent variable data must be contiguous…

A: The question states how data should be placed while conducting a regression analysis in excel. We…

Q: If two returns are positively related to each other, they will have a ________, and if they are…

A: In the given question we are given 4 options regarding a statement and we need to choose correct…

Q: Which one of the following statements regarding the coefficient of determination is NOT correct?

A: Coefficient of correlation is the measure which is used by the management of the company so that it…

Q: A variable which can assume any value within a given range is a. Discrete variable O b. Quantitative…

A:

Q: xplain the shape of the Markowitz (that is, mean-variance) efficient frontier, specifically what…

A: Markowitz (that is, mean-variance) efficient frontier-It is also known as mean - variance model and…

Q: A continuous random variable may assume _____.   a. only fractional values in an interval or…

A: A continuous random variable is the one which can have infinite value. It refers to the variables…

Q: Which of these statements is incorrect: A. Contango occurs when the Basis, Pf - Ps is positive.…

A: Contango is a market condition where the futures price of a commodity is higher than the current…

Q: a.Determine two-sigma control limits using the above data. (F

A: A c-chart helps to monitor the defects that occurred in the process. It helps companies to determine…

Q: Consider the following utility function: u = 400 (1 + 1)−1. xy a. Is this utility function…

A: Solution-

Q: Consider the generalised linear regression model: y = Xẞ + e, with E[e] = 0 and E[ee] = 022. Let the…

A: The question is asking us to evaluate the properties of the Ordinary Least Squares (OLS) and…

Q: (iv) For testing hypotheses: Ho: Bi = 0 H₁: B 0, for i = 1, 2, 3, 4. find t-statistics. Then on…

A: STEPS:  1. Formulate Hypotheses:Set the null hypothesis stating that each regression coefficient is…

Q: Does the IRR analysis yield the results consistent with PW and other equivalence methods?

A: Yes, the IRR analysis gives the results consistent with PW analysis and Equivalence methods.

Q: Show that the lower semi-standard deviation corrected expectation has properties (UT) und (UC)

A: Semi-deviation is an alternative to standard deviation for determining the degree of risk associated…

Q: Find the correlation of assets S and T if the standard deviation of S is 4 and standard deviation of…

A: Correlation is a statistic that helps in measuring the degree to which two variables move in…

Q: An unbiased estimator is one that: A) has the most observations B is on target on average.

A: It is the estimator where the expected value of a given parameter is equal to the true value of the…

Q: Is the equation for volatility not Σ P ( x - x̄ )^2 ? And I am finding online that covariance is…

A: Formula for Variance = Σ P ( x - x̄ )^2

Q: coefficient of correlation is used to obtain what?

A: The correlation coefficient could be a measurable degree of the quality of the connection between…

Q: Directions: Choose the right answer in the multiple-choice   1. What is the cost incurred in the…

A: 1) Cost incurred in the past  : A cost which has been incurred or historical cost of financial…

Q: An exponential probability distribution

A: The correct answer is: (C) is a Continuous distribution. An exponential probability distribution is…