In 10 asset portfolios, the number of terms in the variance formula is
A) 10
B)100
C) 55
D) 20
what is the answer? plz tell the formula also
The formula is in the curriculum.
Look for it and report back.
Seriously: you’re not going to learn anything if we do all of the work.
I guess the formula is n(n-1)/2
So the answer is 45 but that is not in the option so it confuses me that if I m using the wrong formula
Why are you guessing?
What does the curriculum say that formula gives you?
As per curriculum it gives covariance . No formula for variance
It doesn’t give covariance. Please quote the text in the curriculum.
You’re mistaken. It’s in the same paragraph as the formula you cited.
Bingo!
So . . . what’s \dfrac{n\left(n - 1\right)}{2} + n in this case?
There is one more paragraph.
Which states no. Of assets = variance (n)
For covariance = n(n)-n
Which states no. Of assets = variance (n)
For covariance = n(n)-n
Which one is suitable?
If n= 10
So is it n(n-1)/2 + n
= 55
So it is variance or covariance
It’s variance and covariance: all of the variances of returns (each asset with itself) and all of the covariances of returns (each asset with a different asset).
Good job!
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The covariance of a variable with itself is just the variance:
Cov(A,A) = Var (A) 