Math Problem Statement

Consider the returns of the MSCI indexes of developed and emerging markets equity in developed section and emerging section of the Excel file that goes with this quiz. Given the returns over the 1988-2013 period, what has been the correlation between these markets? which is the correct answers? 0.67 or 0.23 or 0.79 or 0.44 or 0.91 or

Solution

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Math Problem Analysis

Mathematical Concepts

Statistics
Correlation
Market Returns

Formulas

Correlation formula: corr(X, Y) = Cov(X, Y) / (σ_X * σ_Y)

Theorems

Covariance
Pearson Correlation Coefficient

Suitable Grade Level

Undergraduate level in Finance or Economics