Question: Q6: What is the Correlation Coefficient (Say between two stock returns over time)? How do standard deviations and covariance interact in this equation (show equation)?

Q6: What is the Correlation Coefficient (Say between two stock returns over time)? How do standard deviations and covariance interact in this equation (show equation)? What is the correlation between stocks/bond market returns, and inflation/inflation expectations/interest rates over time? What does a -1, 0, and +1 correlation mean? Show equation and answer all questions! Q7: Show the Portfolio Standard Deviation (equation). Say for total returns on assets in a stock portfolio. Show equation! --What would HIGH covariance between stocks in the portfolio have on the portfolio standard deviation? --What would LOW covariance between stocks in the portfolio have on the portfolio standard deviation?

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