Which of the following statistics cannot be negative?
A) Covariance
B) Variance
C) E[r]
D) Correlation coefficient

Question

Quizplus · Accepted Answer

Variance is a measure of variability, and it is calculated by squaring the standard deviation. Since the standard deviation cannot be negative (it is the square root of variance), then variance cannot be negative either. Covariance, expected return, and correlation coefficient can all take negative values.

Which of the Following Statistics Cannot Be Negative