The variance of Stock A is .003969, the variance of Stock B is .007056, and the covariance between the two is .0026. What is the correlation coefficient?

Multiple Choice

• .9284

• .5010

• .3510

• .8542

• .4913

Stock Q will return 18 percent in a boom and 9 percent in a normal economy. Stock R will return 9 percent in a boom and 5 percent in a normal economy. There is a 75 percent probability the economy will be normal. What is the standard deviation of a portfolio that is invested 40 percent in stock Q and 60 percent in stock R?

Multiple Choice

• .78%

• 1.41%

• 6.67%

• 2.60%

• 8.01%