2025 CFA Level I Exam: CFA Discussion Topic: formula to use?

Author	Topic: formula to use?
fuller @2004-05-12 12:13:57	when shall I use cov(A,B)/[standard deviation(A)*standard deviation(B)], when shall I use cov(A,B)/var(A) ? why? Thanks a lot!!
tony1973 @2004-05-16 13:24:59	cov(A,B)/[standard deviation(A)*standard deviation(B)] This is the correlation coefficient. cov(A,B)/var(A) This is Beta, the slope of the regression line. What are you trying to do?

Author

Topic: formula to use?

fuller
@2004-05-12 12:13:57

when shall I use cov(A,B)/[standard deviation(A)*standard deviation(B)], when shall I use cov(A,B)/var(A) ? why?

Thanks a lot!!

tony1973
@2004-05-16 13:24:59

cov(A,B)/[standard deviation(A)*standard deviation(B)]
This is the correlation coefficient.

cov(A,B)/var(A)
This is Beta, the slope of the regression line.

What are you trying to do?

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I used your notes and passed ... highly recommended!