CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

If the standard deviation of stock A is 30%, the standard deviation of stock B is 30%, and the correlation between stocks A and B is 0.8, the covariance between stocks A and B is ______.

A. 9%
B. 7.2%
C. 6.42%
Correct Answer: B

Covariance = 30% x 30% x 0.8 = 7.2%

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