The X stocks return relationship with the stock index is given by its correlation co efficient being 0.8.what is the percentage of variation explained by the index ?

Name: The X stocks return relationship with the stock index is given by its correlation co efficient being 0.8.what is the percentage of variation explained by the index ?
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Quizplus · Accepted Answer

The percentage of variation explained by the index is given by the square of the correlation coefficient, which is $0.8^2 = 0.64$ or 64%.

The X Stocks Return Relationship with the Stock Index Is