If the standard deviation of stock A is 12% and the standard deviation of stock B is 16% and the correlation coefficient between the stocks is 0.5,what is the covariance between stock A and stock B?
A)0.0060
B)0.0096
C)0.0012
D)0.05

Question

Quizplus · Accepted Answer

Covariance = (correlation coefficient) x (standard deviation of stock A) x (standard deviation of stock B)
Covariance = 0.5 x 0.12 x 0.16
Covariance = 0.0096

If the Standard Deviation of Stock a Is 12% and the Standard