Multiple Choice
Which of the following equations is INCORRECT?
A) Cov(Ri,Rj) = ![Which of the following equations is INCORRECT? A) Cov(R<sub>i</sub>,R<sub>j</sub>) = Σ(R<sub>i</sub> - R<sub>i</sub>) (R<sub>j</sub> - R<sub>j</sub>) B) Var(R<sub>p</sub>) = w<sub>1</sub><sup>2</sup><sup>SD</sup>(R<sub>1</sub>) + w<sub>2</sub><sup>2</sup><sup>SD</sup>(R<sub>2</sub>) + 2w<sub>1</sub>w<sub>2</sub>Corr(R<sub>1</sub>,R<sub>2</sub>) SD(R<sub>1</sub>) SD(R<sub>2</sub>) C) Corr(R<sub>i</sub>,R<sub>j</sub>) = D) Cov(R<sub>i</sub>,R<sub>j</sub>) = E[(R<sub>i</sub> - E[R<sub>i</sub>]) (R<sub>j</sub> - E[R<sub>j</sub>]) ]](https://d2lvgg3v3hfg70.cloudfront.net/TB1316/11ea84dc_f533_41a5_9a63_814dc31277b3_TB1316_11_TB1316_11.jpg)
Σ(Ri - Ri) (Rj - Rj)
B) Var(Rp) = w12SD(R1) + w22SD(R2) + 2w1w2Corr(R1,R2) SD(R1) SD(R2)
C) Corr(Ri,Rj) = ![Which of the following equations is INCORRECT? A) Cov(R<sub>i</sub>,R<sub>j</sub>) = Σ(R<sub>i</sub> - R<sub>i</sub>) (R<sub>j</sub> - R<sub>j</sub>) B) Var(R<sub>p</sub>) = w<sub>1</sub><sup>2</sup><sup>SD</sup>(R<sub>1</sub>) + w<sub>2</sub><sup>2</sup><sup>SD</sup>(R<sub>2</sub>) + 2w<sub>1</sub>w<sub>2</sub>Corr(R<sub>1</sub>,R<sub>2</sub>) SD(R<sub>1</sub>) SD(R<sub>2</sub>) C) Corr(R<sub>i</sub>,R<sub>j</sub>) = D) Cov(R<sub>i</sub>,R<sub>j</sub>) = E[(R<sub>i</sub> - E[R<sub>i</sub>]) (R<sub>j</sub> - E[R<sub>j</sub>]) ]](https://d2lvgg3v3hfg70.cloudfront.net/TB1316/11ea84dc_f533_41a6_9a63_f39334fd4e76_TB1316_11_TB1316_11.jpg)
D) Cov(Ri,Rj) = E[(Ri - E[Ri]) (Rj - E[Rj]) ]
Correct Answer:
Verified
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