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Basic Question 0 of 2
The following table represents the estimated returns for two motor vehicle production brands - ABC and XYZ, in 3 industrial environments: Strong (50% probability), average (30% probability) and weak (20% probability).
Given the above joint probability function, the covariance between ABC and XYZ returns is closest to:
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
calculate and interpret the covariance and correlation of portfolio returns using a joint probability function for returns
CFA® 2025 Level I Curriculum, Volume 1, Module 5.