If the standard deviation of stock A is 7.2%, the standard deviation of stock B is 5.4%, and the covariance between the two is -0.0031, what is the correlation coefficient? A. -0.80. B. -0.19. C. -0.64.
The formula is: (Covariance of A and B)/[(Standard deviation of A)(Standard Deviation of B)] = (Correlation Coefficient of A and B) = (-0.0031)/[(0.072)(0.054)] = -0.797.
