
Explanation:
. This equation can be rewritten as: .
Plugging in the values gives us: .
(Book 2, Module 15.2, LO 15.d)
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Question 38
Let and be two random variables that represent the annual returns of two different portfolios. If the expected value of is equal to 2, the expected value of is equal to 3, and the expectation of the product of and is 10, what is the covariance between and ?
A
B
C
D
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