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**CFA Practice Question**

The variance of a three-stock portfolio contains ______ individual variance terms and ______ unique covariance terms.

B. 3; 6

C. 6; 6

D. 3; 9

E. 6; 9

A. 3; 3

B. 3; 6

C. 6; 6

D. 3; 9

E. 6; 9

Correct Answer: A

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**User Contributed Comments**
4

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

myanmar |
3 companies A,B,C three possible covariance outcomes: AB AC BC |

surob |
the formula to compute covariance count - n(n-1)/2 |

ljamieson |
nC2 = n(n-1)/2 |

Phlipsen |
thanks ljamieson |