- CFA Exams
- CFA Level I Exam
- Study Session 18. Portfolio Management (1)
- Reading 52. Portfolio Risk and Return: Part I
- Subject 5. Portfolio Risk

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**CFA Practice Question**

If the covariance of Stock A with Stock B is -100, what is the covariance of Stock B with Stock A?

B. -100

C. 1/100

A. +100

B. -100

C. 1/100

Correct Answer: B

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**User Contributed Comments**
4

User |
Comment |
---|---|

Bibhu |
By definition, covariance is the variance of A and B together. So if covariance of A to B is -100, so would be from B to A i.e. -100. |

aniketcpp |
can covariance be negative? A negative covariance means returns move inversely. When one variable's value goes up, the other's tends to go down |

jonan203 |
don't confuse covariance with correlation. |

Rachelle3 |
think of covariance as a box if you see it like this you will get it: {box 1 by box 1}. think of microsoft excel spreadsheets or the old fashioned multiplication we had to use in learning multiplication at school |