You are conducting some statistical analyses on two securities: Stock X and Stock Y. You find that Stock X has a volatility (i.e., a standard deviation) of 5.78%, while Stock Y has a volatility of 7.94%. If the correlation between the returns of the two firms is 0.25, then what is the covariance between the returns of the two firms closest to? O 0.0011 O 0.0021 O 11.47 O 21.55
You are conducting some statistical analyses on two securities: Stock X and Stock Y. You find that Stock X has a volatility (i.e., a standard deviation) of 5.78%, while Stock Y has a volatility of 7.94%. If the correlation between the returns of the two firms is 0.25, then what is the covariance between the returns of the two firms closest to? O 0.0011 O 0.0021 O 11.47 O 21.55
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 6P
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Question
![You are conducting some statistical analyses on two securities: Stock X and Stock Y.
You find that Stock X has a volatility (i.e., a standard deviation) of 5.78%, while Stock
Y has a volatility of 7.94%. If the correlation between the returns of the two firms is
0.25, then what is the covariance between the returns of the two firms closest to?
O 0.0011
0.0021
O 11.47
O 21.55
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc346b79-42af-4ded-962a-f1189017b09f%2F356aad46-d662-48dd-90e9-832500ef546b%2Fdk6m42s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You are conducting some statistical analyses on two securities: Stock X and Stock Y.
You find that Stock X has a volatility (i.e., a standard deviation) of 5.78%, while Stock
Y has a volatility of 7.94%. If the correlation between the returns of the two firms is
0.25, then what is the covariance between the returns of the two firms closest to?
O 0.0011
0.0021
O 11.47
O 21.55
0
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