Correlation between changes in stock

Reference no: EM131032434

Problem:

The same article that claims that the correlation between changes in stock prices in Europe and the United States is 0.8 goes on to say: "Crudely, that means that movements on Wall Street can explain 80% of price movements in Europe."

Required:

(i) Is this true? Circle your answer: Yes No

(ii) What is the correct percent explained if r = 0.8?

Reference no: EM131032434

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