Two stock analysts rank five investment portfolios for overall performance and risk. $\begin{array}{c}
\quad\quad\quad\quad\quad\quad\quad\text {Portfolio}\
\quad \quad\quad\quad \quad\quad\quad\quad \quad A\quad B\quad C\quad D\quad E\

\begin{array}{|l|l|l|l|l|l|}
\hline \text { Broker 1 - Rankings } & 4 & 5 & 2 & 1 & 3 \
\hline \text { Broker 2 - Rankings } & 1 & 4 & 3 & 2 & 5 \
\hline
\end{array}\end{array}$
Using these rankings, the Spearman rank correlation coefficient is ___________.
A)0.80
B)0.20
C)0.05
D)0.95
E)1.00

Question

Two stock analysts rank five investment portfolios for overall performance and risk. $\begin{array}{c}
\quad\quad\quad\quad\quad\quad\quad\text {Portfolio}\
\quad \quad\quad\quad \quad\quad\quad\quad \quad A\quad B\quad C\quad D\quad E\

\begin{array}{|l|l|l|l|l|l|}
\hline \text { Broker 1 - Rankings } & 4 & 5 & 2 & 1 & 3 \
\hline \text { Broker 2 - Rankings } & 1 & 4 & 3 & 2 & 5 \
\hline
\end{array}\end{array}$
 Using these rankings, the Spearman rank correlation coefficient is ___________.
A)0.80
B)0.20
C)0.05
D)0.95
E)1.00

Quizplus · Accepted Answer

The Spearman rank correlation coefficient is calculated using the formula $1 - \frac{6 \sum d_i^2}{n(n^2-1)}$, where $d_i$ is the difference between the ranks of each portfolio and $n$ is the number of portfolios. Calculating this gives a coefficient of 0.20.

Two Stock Analysts Rank Five Investment Portfolios for Overall Performance