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....
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 Spring '10
 CHOW
 Standard Deviation, Variance, Probability theory, Cauchy distribution, portfolio standard deviation

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