1. A measure of how the returns of two assets move in relation to each other is the A. Geometric mean. B. Covariance. C. Standard deviation 2. The variance of returns is 0.09 for stock A and 0.04 for stock B. The covariance between the returns of A and B is 0.006. The correlation of returns between A and B is: A. 0.10. B. 0.20 C. 0.30 3. In a 5-year period, the annual returns on an investment are 5% -3% -4%, 2%, and 6%. The standard deviation of annual returns on this investment is closest to (nuse the arithmetic mean return in your calculations): A. 4.0%. B. 4.5% C. 20.7% 4. In a 3-year period, the annual returns on an investment are 5% -3%, and 6%. The geometric mean retum of annual retums on this investment is closest to A. 8.0% B. 15.0% C 2.0% 3. Which of the following asset classes has historically had the highest returns and standard deviation? A. Small-cap stocks. B. Large-cap stocks. C. Long-term corporate bonds. 6. Which of the following statements is least accurate? A. The geometric mean return is always less than or equal to the arithmetic mean return. B. The arithmetic mean return is always less than or equal to the geometric mean return. C. The geometric mean return takes into account the compounding that occurs from period to period