What is the covariance between the random variable Y and itself, Cov1Y, Y2? What is the correlation between a random variable and itself?
Answer to relevant QuestionsIf an investor decides on the all-Microsoft portfolio (in the text example), does it make sense to use the Sharpe ratio to decide whether to invest $2,000 or $4,000? Repeat the calculations of Exercise 33. Rather than treat the random variables X and Y as independent, assume that Cov(X, Y) = 12,500. Customers at a fast-food restaurant buy both sandwiches and drinks. The following joint distribution summarizes the numbers of sandwiches (X) and drinks (Y) purchased by customers. (a) Find the expected value and variance of ...The relevance of variance and covariance developed for random variables in this chapter carries over to the analysis of returns on real stocks. The data file “daily _ stocks” includes the daily percentage changes in the ...A manager supervises five experimental projects. Each has a 50-50 chance for producing an innovative, successful new product. The teams that are developing each project work separately, so the success of one project is ...
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