Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

As we know that portfolio risk calculation includes the variances of real estate returns and correlation between real estate returns and returns of other assets.

As we know that portfolio risk calculation includes the variances of real estate returns and correlation between real estate returns and returns of other assets. Thus it is clear that expected returns will not affect portfolio risk but Standard deviation and correlation with the returns of other assets will affect it. Correlation between real estate returns and returns for cash is zero.

Explain that how is correlation between real state returns and returns for cash is zero?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Zen Of Personal Finance How To Get It Going And Keep It Flowing

Authors: Donald J. Simon

1st Edition

0979815517, 9780979815515

More Books

Students also viewed these Finance questions