Isnt the observation that “Emerging market returns’ correlation with the developed markets goes up during time of increased volatility” a function of statistical properties? I remember reading it in at least 2 seperate SSs. Explanation to Q# 40155 in S. pro apparently doesnt think so. Any updates?

I believe that this is TRUE for this test. I think we should ignore the statistical anomolies on this one.

bigwilly Wrote: ------------------------------------------------------- > I believe that this is TRUE for this test. I > think we should ignore the statistical anomolies > on this one. Are you saying I am rite and the S.pro version is a typo?

dont know what Schweser says, dont have Schweser

if it says true ( or long run for that matter) correlation goes up - then it is false if it says correlation goes up - then it is true

CSK??? What the heck are you trying to say on the first one ??

OK, so what is the answer…if we see that on the exam, do we say it is true that corrleation “go up” during time of crisis, or we mark it false??

i will say true, you will say false that way it will be net 0 on the curve…

I will say True also, so now we are +66%

Cool…thanks

comp_sci_kid Wrote: ------------------------------------------------------- > i will say true, you will say false that way it > will be net 0 on the curve… Thanks that really helped … now can some1 tell me if its just a statistical anomaly or are I banks covering it up to make people bullish on EMs?

cfa dude Wrote: ------------------------------------------------------- > comp_sci_kid Wrote: > -------------------------------------------------- > ----- > > i will say true, you will say false that way it > > will be net 0 on the curve… > > Thanks that really helped … now can some1 tell > me if its just a statistical anomaly or are I > banks covering it up to make people bullish on > EMs? CFAI claims it is statistical anomaly and that ‘true’ correlation doesnt go up. Whatever that means

There has been a lot of empirical research done on this topic. Nothing has been 100% conclusive, but majority of researchers think that “true” correlation doesn’t go up…

this is where the essay type ques are better … you can argue both ways and they will give you marks