Calculate the DEAR for the following portfolio with the correlation coefficients and then with the perfect positive correlation between various asset groups. What is the amount of risk reduction resulting from the lack of perfect positive correlation among the various asset groups?

Assets Estimated DEAR _(S,FX) _(S,B) _(B,FX) Bonds (B) $ 600,000 -0.12 0.45 0.15 Stocks (S) $ 800,000 Foreign Exchange (FX) $ 500,000