Portfolio Risk Flashcards
1
Q
A
Where the is imperfect positive or negaitve correlation between two assets the portfolio risk formula requires the coveriance between the two assets.
IV: Is the right formula when two securities are perfectly correlated
2
Q
A
3
Q
A
Correlation coefficient = Cov A, B / SDA x SDB = 187 / 13 x 18 = 0.8
4
Q
A
