Consider two securities, A and B. Securities A and B have a correlation coefficient of 0.35. Security A has standard deviation of 12%, and security B has standard deviation of 25%. Calculate the covariance between these two securities.

The co-variance between these two securities is 0.0105        

Step-by-step explanation:

We are given the following in the question:

Correlation coefficient = 0.35

Standard deviation of Security A =  12%

Standard deviation of Security B =  25%

We have to find the co-variance between these two securities.

Formula:

Putting values, we get,

Thus, the co-variance between these two securities is 0.0105

the answer for this question is 38

i think the correct option is the second option.