2 asset portfolio - which formula?
The portfolio management study session introduces another formula for working out the variance of a two asset portfolio.
Qp = w2q2 +w2q2 + 2w1w1q1q2P1,2
Qp = w2q2+w2q2+2w1w2Cov1,2
My question is which formula do you use for the exam? As you will notice one uses sd’s in the latter part of the formula so both methods will give conflicting answers.
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