If the standard deviation of stock A is 10% and the standard deviation of stock B is 15% and the correlation coefficient between the stocks is 0.5,what is the covariance between stock A and stock B?
A)0.05
B)0.0005
C)0.015
D)0.0075

Question

Quizplus · Accepted Answer

Covariance = correlation coefficient * standard deviation A * standard deviation B
Covariance = 0.5 * 0.1 * 0.15 = 0.0075

If the Standard Deviation of Stock a Is 10% and the Standard