The covariance between H and I is 45%% (Formula 8.9). The variance of H is 90%%, the
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The covariance between H and I is 45%% (Formula 8.9). The variance of H is 90%%, the variance of I is 189%% (Table 8.4). Therefore, the shortcut Formula 8.10 gives Var(˜rM) = (3/4)2 . 90%% + (1/4)2 . 189%% + 2 . (3/4) . (1/4) . 45%% = 79.3125%%
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