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The variance of return for Stock A is 22 percent, and the variance of return for...

The variance of return for Stock A is 22 percent, and the variance of return for Stock B is 28 percent. The covariance between Stock A and Stock B is -.2. What is the correlation between Stocks A and B?

Group of answer choices a. -0.7 b. - 0.8 c. -0 .9 d. -1.0

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Answer #1

22 / = -22 så= 22 o²b = Corca, b) = 28 /. 3.28 - O2 Correlation Cor (a,b) barb ---.2 6a= 5.22 56 = ſ.28 √.22 X 2ğ -0.8 answe

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