Question

Which of the following is true if the coefficient of correlation between two variables X and Y is zero?

a) covariance is zero

b) covariance is positive

c) covariance is negative

d) variance of X is zero

e) variance of Y is zero

Answer 1

If X and Y are uncorrelated, then

Var(X+Y)=Var(X)+Var(Y)

Answer is A