# Question

What would be the portfolio standard deviation if the two investments in problem 3 had a correlation coefficient (rij) of +0.40?

## Answer to relevant Questions

If the two investments above were perfectly positively correlated (rij = +1), what would be the portfolio standard deviation? Why is the reinvestment rate assumption critical to bond portfolio management? Compute the simple weighted average life for the following data. Use an approach similar to that in Table 18–1 on page 468. Year Cash Flow 1 $ 105 2 105 3 105 4 105 5 105 5 $1,000 a. Compute the duration for the following data. Use a discount rate of 13 percent. b. Explain why the answer to part a is higher than the answer to problem 2. c. If in part a the discount rate were 10 percent instead of 13 ...Why does Canada represent a relatively poor outlet for achieving risk reduction for U.S. investors? (Merely use your own judgment in answering this question.)Post your question

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