Question: Let X and Y be two random variables representing the annual returns of two different portfolios. If E[X] = 3, E[X 2 ] = 26,

Let X and Y be two random variables representing the annual returns of two different portfolios. If E[X] = 3, E[X²] = 26, E[Y] = 4, E[Y²] = 40, and E[XY] = 15, then what is the Pearson correlation between X and Y?

-1
0
14.85%
1

A risk manager gathers five years of historical returns to calculate the Spearman rank correlation coefficient for stocks X and Y from 2010 to 2014 are as follows:

Year	X	Y
2010	5.00%	-10.00%
2011	50.00%	-5.00%
2012	-10.00%	20.00%
2013	-20.00%	40.00%
2014	30.00%	15.00%

What is the Spearman rank correlation coefficient for stocks returns of X and Y?

-0.7
-0.5
0.3
0.7

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