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Portfolio Management Professional (PfMP)

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Section A (1 Mark)
The covariance of the market returns with the stocks returns is 0.007. The standard deviation of the market is
7% and standard deviation of stock's return is 10%. What is the correlation coefficient between stocks and market returns?
A. 0.5
B. 1.25
C. 0.91
D. 0
Answer: D

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