fins2624 question help (1 Viewer)

[megaman64]

The covariance of a stochastic variable with itself will be lower than the variance of that variable because of the diversification effect. Is this correct?
Select one:
a. Yes
b. No
c. It depends on the correlation coefficient
d. It is impossible to say

 

[michaeljennings]

Cant remember but im pretty sure Cov(X,X) = Var(X) so the answer is b) no as its equal to the variance not lower than it