Might be wondering if I need to use the second formula just to find the minimum variance on the CAPM Model and the first one on a hedge position.
would you mind share some light over it?
T3.CH8 (page 12)
thanks for the reply and sorry for my ignorance, but I couldn't fully understand whether they represent the same formula or I need to use them in different occasions.
I did understand that Beta represents:
- correl(a,b)*stdev(a)/stdev(b) or COV (a,b)/ variance of b (such as...
Hi there, would you mind clarifying the concept to me pls?
Can't tell the difference between these two formulas of MVP:
- [variance(a) - correl(a,b)*stdev(a)*stdev(b)]/[variance(a) + variance(b) - 2*correl(a,b)*stdev(a)*stdev(b)]
When do I use each one of...