Peter knows that the covariance in the return on two assets is 0.0025. Without knowing the expected
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Peter knows that the covariance in the return on two assets is −0.0025. Without knowing the expected return of the two assets, explain what that covariance means.
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
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The covariance measure is dependent on the expected return of the two asset...View the full answer
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1119371403
4th edition
Authors: Robert Parrino, David S. Kidwell, Thomas Bates
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