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Basic Question 3 of 3
Which of the following statements is not true?
B. An inverse relationship between X and Y implies negative correlation.
C. The correlation between two random variables is given by the ratio of their covariance with the product of their standard deviations.
A. -1 < σ(X,Y) < 1
B. An inverse relationship between X and Y implies negative correlation.
C. The correlation between two random variables is given by the ratio of their covariance with the product of their standard deviations.
User Contributed Comments 4
| User | Comment |
|---|---|
| annieyiyan | I thought the correct answer: 0<=p(x,y)=1, why the joint probility could go negotively (-1<=p(x,y) |
| mike250 | it's not joint prop. It is the correlation between X and Y. |
| alester83 | annie, that statement is correct for covariance |
| Rachelle3 | A very complicated way of saying at some point it must be from -1 up to 1 compare correct answer to the option of the wrong answer A which does not show < = signs. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
interpret correlation between two variables to address an investment problem
CFA® 2025 Level I Curriculum, Volume 1, Module 3.