Covariance of returns is [...] if, when the return on one asset is above its expected value, the return on the other asset is above its expected value.
Answer
positive
(an average positive relationship between returns).
Tags
#reading-9-probability-concepts
Question
Covariance of returns is [...] if, when the return on one asset is above its expected value, the return on the other asset is above its expected value.
Answer
?
Tags
#reading-9-probability-concepts
Question
Covariance of returns is [...] if, when the return on one asset is above its expected value, the return on the other asset is above its expected value.
Answer
positive
(an average positive relationship between returns).
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Subject 7. Covariance and Correlation tive if, when the return on one asset is above its expected value, the return on the other asset is below its expected value (an average inverse relationship between returns). Covariance of returns is 0 if returns on the assets are unrelated. <span>Covariance of returns is positive if, when the return on one asset is above its expected value, the return on the other asset is above its expected value (an average positive relationship between returns). The covariance of a random variable with itself (own covariance) is its own variance.
Example
Suppose that the future short-term outlook for the economy is favorable w
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