This preview shows page 1. Sign up to view the full content.
Unformatted text preview: A Yes, you most certainly can. Q: NO.1 In Problem7, it is mentioned&quot; the smallest corelation&quot;, I wannna ask that does the &quot;smallest correlation&quot; mean the rho12 of the two securities is 1, although I think the RHO12 should and could only be 1 because it can be risk free only on the occation that RHO12=1? I just wannna confirm my thinking. A We saw in class that RHO12 must be greater than or equal to 1 and less than or equal to +1. Given the range from 1 to +1, it should be easy for you to decide what is the smallest value RHO12 can take. Q: IN PROBLEM8, it asked us to calculate the expected value of the portfolio next year, but I think we cannot get the expected value because we have not been told the present value of the portfolio. Could we assume that the present value is 1000? A: If you re read the question carefully, you will find that you have all the information that you need to answer the question....
View
Full
Document
 Spring '10
 CHOW

Click to edit the document details