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Basic Question 2 of 2

The following table represents the estimated returns for two motor vehicle production brands - ABC and XYZ, in 3 industrial environments: Strong (50% probability), average (30% probability) and weak (20% probability).

Given the above joint probability function, the covariance between ABC and XYZ returns is closest to:

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You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu

Colin Sampaleanu

Learning Outcome Statements

calculate and interpret the covariance and correlation of portfolio returns using a joint probability function for returns

CFA® 2025 Level I Curriculum, Volume 1, Module 5.