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Basic Question 9 of 23
The variance of a three-stock portfolio contains ______ individual variance terms and ______ unique covariance terms.
B. 3; 6
C. 6; 6
D. 3; 9
E. 6; 9
A. 3; 3
B. 3; 6
C. 6; 6
D. 3; 9
E. 6; 9
User Contributed Comments 4
| User | Comment |
|---|---|
| myanmar | 3 companies A,B,C three possible covariance outcomes: AB AC BC |
| surob | the formula to compute covariance count - n(n-1)/2 |
| ljamieson | nC2 = n(n-1)/2 |
| Phlipsen | thanks ljamieson |
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
Learning Outcome Statements
calculate and interpret the mean, variance, and covariance (or correlation) of asset returns based on historical data
calculate and interpret portfolio standard deviation
describe the effect on a portfolio's risk of investing in assets that are less than perfectly correlated
CFA® 2025 Level I Curriculum, Volume 2, Module 1.