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1. The standard deviation of return on investment A is .18 while the standard deviation of return on investment B is .29. If the covariance of returns on A and B is .0141, the correlation coefficient between the returns on A and B is __________.

0.22

0.32

0.27

0.35

2. A portfolio is composed of two stocks, A and B. Stock A has a standard deviation of return of 23% while stock B has a standard deviation of return of 21%. Stock A comprises 40% of the portfolio while stock B comprises 60% of the portfolio. If the variance of return on the portfolio is .0380, the correlation coefficient between the returns on A and B is __________.

0.589

0.604

0.599

0.579

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92863090

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