Its been a few years out of school so my math is a bit rusty. So I'm not following dowd's example 4.1 for Correlation Weighted HS in the notes, page 26.
Some questions: how did you get A = [1, 0, p, sqrt(1-p^2)]
How did you get that the correlation of A bar is 0.9?
@David Harper CFA FRM can you please explain the reasoning behind 612.50 for the replicating portfolio? I am not sure how this number came about. Also I'm not sure how the cost came at $0.58, the difference is 629.34 - 612.50
Hi, @David Harper CFA FRM can you tell me around 17:15 in the video why you get the substitution for R' to be Mu - sigma(z)
It's very similar to normal but I can't see where you derived it.
Please clarify. Thanks!
EDIT: I kind of see how it is done. So a yes or no answer would suffice. If you...
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