
Ultimate access to all questions.
A value-oriented fund manager in search of undervalued stocks is evaluating the returns of two technology stocks, stock J and stock K. The manager estimates that the correlation between the returns of stock J and stock K is 0.37, and the corresponding covariance is 0.0054. If the standard deviation of the returns on stock K is 0.11, what is the variance of the returns on stock J?
A
0.0176
B
0.0407
C
0.0735
D
0.1327