- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 5. Portfolio Mathematics
- Subject 1. Portfolio Expected Value and Variance of Return

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**CFA Practice Question**

The correlation between two random variables is their covariance standardized by the product of the variables' ______.

A. standard deviations

B. variances

C. coefficients of variation

**Explanation:**The correlation between two random variables is equal to the covariance between the variables divided by the product of the variables' standard deviations.

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