Question: 1a) What data would you need to calculate the correlation between the returns on two assets? How would you use this data to calculate the

1a) What data would you need to calculate the correlation between the returns on two assets? How would you use this data to calculate the correlation between the returns on the two assets?

b) How is correlation related to diversification?

c) Why do the correlations between the returns on assets change over time?

d) How is correlation related to the expected return on a portfolio?

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