Ask Question
BusinessBusiness
6 April, 00:27

The variance of stock a is. 005, the variance of the market is. 008 and the covariance between the two is. 0026. what is the correlation coefficient?

+1
Answers (1)
  1. 6 April, 03:57
    0
    Correlation coefficient formula = Covariance between Stock A and market / Standard deviation of stock * standard deviation of market

    Covariance between stock and market = 0.0026

    Standard deviation of stock A = square root of variance = square root of (0.005) = 0.07071

    Standard deviation of market = square root of (0.008) = 0.08944

    Correlation coefficient = 0.0026 / (0.07071 * 0.08944) = 0.4111

    Answer is 0.4111
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The variance of stock a is. 005, the variance of the market is. 008 and the covariance between the two is. 0026. what is the correlation ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
In the solow growth model, a nation reaches its steady state equilibrium when
Answers (1)
Since she was hired four months ago, Janelle has performed poorly on many aspects of her job. This is likely to be attributed toMultiple Choiceexternal causes. internal causes. fundamental bias. nothing; there is not enough information.
Answers (1)
All of the following statements about ABC analysis are true except a. inventory may be categorized by measures other than dollar volume b. it categorizes on-hand inventory into three groups based on annual dollar volume c.
Answers (1)
Suppose two companies own adjacent oil fields. under the two fields is a common pool of oil worth $60 million. for each well that is drilled, the company that drills the well incurs a cost of $4 million. each company can drill up to two wells.
Answers (1)
Mary jo spends $2,180 to buy stock in two companies. she pays $23 a share to one of the companies and $20 a share to the other.
Answers (1)
New Questions in Business
True or false: if the extra output produced from an additional unit of capital falls as the stock of capital rises, the country is possibly overinvesting in capital.
Answers (1)
Janet has identified four features of a college to which she is planning to apply for admission. Identify the pros and cons of Janet's choice of college.
Answers (1)
Which is riskier, but has the potential for a higher rate of return? saving or investing
Answers (2)
You are comparing two annuities. Annuity A pays $100 at the end of each month for 10 years. Annuity B pays $100 at the beginning of each month for 10 years. The rate of return on both annuities is 8 percent.
Answers (1)
What will you call an employee who prioritize her goals rather than the team goal?
Answers (1)
Home » Business » The variance of stock a is. 005, the variance of the market is. 008 and the covariance between the two is. 0026. what is the correlation coefficient?
Sign Up Forgot Password?