The relationship between covariance and correlation for two assets x and y is expressed by which of the following equations (where covarx,y is the covariance between x and y , x and y are the respective standard deviations and x,y is the correlation between x and y ):

The relationship between covariance and correlation for two assets x and y is expressed by which of the following equations (where covarx,y is the covariance between x and y , x and y are the respective standard deviations and x,y is the correlation between x and y ):

A)

B)

C)

D)

None of the above
A . Option A
B . Option B
C . Option C
D . Option D

View Answer

Answer: B

Explanation:

Choice ‘b’ is the correct answer. The other relationships are not correct.