security a has a standard deviation of 23% and the market has a standard deviation of 18%. the correlation coefficient between security a and the market is 0.80. calculate the percent change in security a's price that can be explained by changes in the market. a) 64% b) 80% c) 50% d) 36%

Question

16-11-2022
Business

contestada

security a has a standard deviation of 23% and the market has a standard deviation of 18%. the correlation coefficient between security a and the market is 0.80. calculate the percent change in security a's price that can be explained by changes in the market. a) 64% b) 80% c) 50% d) 36%

Respuesta :

Otras preguntas

Which was the first labor strike to end with the president intervening on behalf of the workers? (1) 1886 Haymarket Affair (3) 1902 Anthracite Coal Strike (2) 1

What established the Federal Deposit Insurance Corporation (FDIC), with the greater goal of restoring public confidence in the banking system? Agricultural Adju

World War I debt and reparations led to this country’s bankruptcy and resentment of its neighbors. a. Germany c. Poland b. France d. Great Britain

A 3.00-newton force causes a spring to stretch 60.0 centimeters. Calculate the spring constant of this spring. [Show all work, including the equation and substi

Which of the following diseases is caused by a virus? A. African sleeping sickness B. common cold C. tuberculosis D. athlete’s foot

Which of the following refers to the increasing size of deserts worldwide? A. disintegration B. desertification C. decomposition D. disaggregation

The interior of Australia, which is sparsely inhabited with low plateaus and plains is called A. The coral reef B. The Outback C. The atoll D. The outer isl

Which of the following is an example of an exploitation colony? A. India B. Australia C. Great Britain D. the United States

Which of the following lists demonstrates various tenses of an irregular verb? A. I try, I tried, I will try B. I walk, I walked, I will walk C. I call, I call

Darla copies her uncle's address and phone number into her contact list. His area code is 775. His ZIP code is 89507. Which statement about the value of the 5 i

ACCESS MORE

akankshasharma92 akankshasharma92 · Answer 1 · 2022-11-25T18:46:45+01:00

According to the given information, the percent change in security A's price that can be explained by changes in the market is 64%.

The correlation coefficient between security a and the market is 0.80

The percent change in security a's price that can be explained by changes in the market = [tex]0.8^2[/tex] = 0.64 = 64%

The coefficient of determination (R squared), which measures how well two variables correlate, is 0.80. As a result, only 64% of investment returns can be accounted for by changes in the market (systematic risk accounts for the remaining 64%).

The strength of associations between data variables is evaluated using correlation coefficients.
The most widely used indicator, known as a Pearson correlation coefficient, assesses the strength and direction of a linear relationship between two variables.
Always, values fall within the range of -1 for a perfectly inverse relationship and 1 for a perfectly positive correlation. A linear relationship or a very weak correlation is indicated by values that are zero or very close to zero.
Depending on the application, certain coefficient values may be necessary to indicate a significant association. In the case of a normal population distribution, the correlation coefficient and sample size can be used to determine the correlation's statistical significance.

Learn more about Correlation coefficient, here

https://brainly.com/question/15577278

#SPJ4