CFA Practice Question

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CFA Practice Question

Consider the following covariance matrix for 3 different variables, X, Y, and Z:

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
Correct Answer: B

Cov(Y,Z) = Cov(Z,Y) = 7, Cov(Z,X) = Cov(X,Z) = 9, and Cov(Y,X) = Cov(X,Y) = 5. Therefore, the complete correlation matrix looks like this:

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.
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