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Hi, anyone done a Corporate Finance Assignment similar to below? Or can kindly enlighten me on how to go about doing it as i got no clue how to start it. Thanks in advance.

a) For a two asset portfolio, demonstrate that portfolio risk can be reduce to zero with perfect negative correlation.
0 (0%)
b) Explain why this is not necessarily a particularly convincing explanation for portfolio effects and demonstrate how portfolio effects arise in a rather different way for correlations close to zero.
0 (0%)
c) Outline and discuss the reason why there is little or no portfolio effect with strong positive correlation.
1 (100%)

Total Members Voted: 0

Author Topic: Help on Finance project  (Read 2136 times)

shirah

  • Guest
Help on Finance project
« on: June 03, 2011, 09:51 AM »
Hi, anyone done a Corporate Finance Assignment similar to below? Or can kindly enlighten me on how to go about doing it as i got no clue how to start it. Thanks in advance.

a) For a two asset portfolio, demonstrate that portfolio risk can be reduce to zero with perfect negative correlation.

b) Explain why this is not necessarily a particularly convincing explanation for portfolio effects and demonstrate how portfolio effects arise in a rather different way for correlations close to zero.

c) Outline and discuss the reason why there is little or no portfolio effect with strong positive correlation.
 

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roshcrazy

  • Guest
Re: Help on Finance project
« Reply #1 on: June 06, 2011, 12:51 AM »
It is basically about asset correlation in portfolio. Check these links:

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shirah

  • Guest
Re: Help on Finance project
« Reply #2 on: June 08, 2011, 12:27 AM »
hey

Cud u roughly brief me about the link. kinda of confused thank
 

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