Skip to content
# The correlation between two assets equals -0.296 and the covariance between the two assets is -0.0104. Which of the following least likely lists the standard deviations of the two assets?

Question:

A
23.4% and 14.1%

Explaination

The product of the two asset’s standard deviations, x, is calculated as:

Correlation = Covariance / x

x = –0.0104/–0.296 = 0.0351

The product of 23.4% and 14.1% does not equal 0.0351.

Take more free practice tests for other ASVAB topics with our cfa practice questions now!