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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?
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