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Basic Question 1 of 17

If the standard deviation of stock A is 30%, the standard deviation of stock B is 30%, and the correlation between stocks A and B is 0.8, the covariance between stocks A and B is ______.

A. 9%
B. 7.2%
C. 6.42%

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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!


Learning Outcome Statements

calculate and interpret portfolio standard deviation;

describe the effect on a portfolio's risk of investing in assets that are less than perfectly correlated;

CFA® 2024 Level I Curriculum, Volume 5, Module 62.