- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 8. Probability Concepts
- Subject 7. Covariance and Correlation

###
**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.

###
**User Contributed Comments**
0

You need to log in first to add your comment.