If the covariance of Stock A with Stock B is .20,then what is the covariance of Stock B with Stock A?
A).20
B).80
C)−.20
D)4
E)−1.20

Question

Quizplus · Accepted Answer

Covariance is a measure of how two variables move together relative to their respective means. The covariance of Stock A with Stock B being .20 means that as Stock A moves away from its mean, Stock B tends to move in the same direction, but only by 20% of the distance that Stock A moved. The covariance of Stock B with Stock A will be the same as the covariance of Stock A with Stock B, which is .20.

If the Covariance of Stock a with Stock B Is