CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

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

A. +100
B. -100
C. 1/100
Correct Answer: B

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
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