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Basic Question 2 of 6
Consider the following covariance matrix for 3 different variables, X, Y, and Z:
B. 7, 9, 5
C. 4, 9, 7
What are the values for Cov(Y,Z), Cov(Z,X), and Cov(Y,X)?
A. 9, 5, 7
B. 7, 9, 5
C. 4, 9, 7
User Contributed Comments 6
| User | Comment |
|---|---|
| chamad | Remember:Cov are symetric around The Diagonale |
| abhinavkapoor | can somebody please explain it? |
| abhinavkapoor | GOT IT. |
| dmfz | This makes no sense |
| idzani | More like an IQ test than comprehension test lol |
| ashish100 | I'll give one example then move on. Cov (Y,Z) = Cov (Z,Y) Cov (Z,Y) = 7. This is given. Therefore Cov (Y,Z) = 7 as well. Do the same for the rest. |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
calculate and interpret the expected value, variance, standard deviation, covariances, and correlations of portfolio returns;
CFA® 2024 Level I Curriculum, Volume 1, Module 3.