If the covariance between the prices of two investments is 100,000, must the correlation between the two
Question:
If the covariance between the prices of two investments is 100,000, must the correlation between the two be close to 1?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 62% (8 reviews)
No The covariance depends on the u...View the full answer
Answered By
Usman Nasir
I did Master of Commerce in year 2009 and completed ACCA (Association of Chartered Certified Accountants) in year 2013. I have 10 years of practical experience inclusive of teaching and industry. Currently i am working in a multinational company as finance manager and serving as part time teacher in a university. I have been doing tutoring via many sites. I am very strong at solving numerical / theoretical scenario-based questions.
4.60+
16+ Reviews
28+ Question Solved
Related Book For
Statistics For Business Decision Making And Analysis
ISBN: 9780134497167
3rd Edition
Authors: Robert A. Stine, Dean Foster
Question Posted:
Students also viewed these Mathematics questions
-
1. If net revenue at a firm is about 10% of gross sales, then a scatterplot of net revenue versus gross sales would show a nonlinear pattern rather than a line. 2. If two variables are linearly...
-
The file Hotel Prices contains the prices in British pounds (about US$ 1.52 as of July 2013) of a room at two-star, three-star, and four-star hotels in cities around the world in 2013. (Data...
-
The file contains the average price of a room at two-star, three-star, and four-star hotels in cities around the world in 2009 in English pounds (about US$1.57 as of October 2010). Complete the...
-
John Wilson is a conservative investor who has asked your advice about two bonds he is considering. One is a seasoned issue of the Capri Fashion Company that was first sold 22 years ago at a face...
-
Cascade, Inc., produces the basic fillings used in many popular frozen desserts and treats-vanilla and chocolate ice creams, puddings, meringues, and fudge. Cascade uses standard costing and carries...
-
Two sources of sound are located on the x axis, and each emits power uniformly in all directions. There are no reflections. One source is positioned at the origin and the other at x = + 123 m. The...
-
Consider the Michaelis-Menten model introduced in Eq. (12.23). Graph the expectation function for this model for \(\theta_{1}=200\) and \(\theta_{2}=0.04,0.06,0.08\), 0.10 . Overlay these curves on...
-
Tolo Co. plans the following repurchases: $10 million in one year, nothing in two years, and $20 million in three years. After that, it will stop repurchasing and will issue dividends totaling $25...
-
Use game theory to model everyday interactions. Suppose you and a partner play the following game. You both are situated with your backs to each other, 20 feet apart. You have a basketball and a...
-
The small cart has a speed v A = 4 m /s as it passes point A. It moves without appreciable friction and passes over the top hump of the track. Determine the cart speed as it passes point B. Is...
-
If the correlation between the price of Microsoft stock and the price of an Xbox is 1, could you predict the price of an Xbox from knowing the price of Microsoft stock? How well?
-
Does a portfolio formed from the mix of three investments have more risk (variance) than a portfolio formed from two?
-
Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a result, RT is expected to experience a...
-
How might operating leverage impact a companys decision making process?
-
how to properly decline a job settlement (offering a low amount not money) for wrongful termination ?
-
It seems that when considering international business pursuits, many US companies make one of two mistakes: 1) they either assume it is much easier than it actually is or 2) they assume it is much...
-
Provide information regarding Russia's foreign exchange regime, foreign exchange rate, and trade account component of the balance of payments. According to McKinsey, currency and exchange rate...
-
With it being financed and implemented under a PPP structure, how do macroeconomic conditions and toll rate issues serve to deter projects' investors and financiers?
-
In Section 11.2 we always assumed that the value of g was the same at all points on the body. This is not a good approximation if the dimensions of the body are great enough, because the value of g...
-
Which should drive action planning more, strengths or weaknesses? That is, is it more important to build on your strengths or to reduce your weaknesses? Explain.
-
1. On average, retailers expect to sell the same amount on the first weekend and the second weekend. 2. If retail sales are exceptionally low on the first weekend, retailers expect lower than average...
-
What is the covariance between the random variable Y and itself, Cov1Y, Y2? What is the correlation between a random variable and itself?
-
If 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?
-
Create a C++ program that concatenates 'n' number of strings input by the user, while adhering to the following specifications. Note that the strcat() function cannot be used. 1. The program asks the...
-
What role do ethnomethodological approaches play in uncovering the underlying norms and assumptions that govern everyday social interactions, and how do these insights inform our understanding of...
-
Consider f(x) = (x1 + x). Given the iterate xk = [H] and the search direction dk = show that " dk is a descent direction and find the minimizer of min f(xk+adk). a0
Study smarter with the SolutionInn App