Question

IMPORTANT: I don't need help with "a". However, I do need help with b&c

IMPORTANT: I understand that there's a walkthrough given bellow. However, I do not understand the walkthrough given for b&c.

Part B

- Why does E(x)+E(y)=2u (2 mew)?

-What is this?: (5 I honestly have no idea what it is. Please explain to me what it is and what its significance is within the problem.

-This may be the same thing as the symbol above, but just in case it isn't I want to ask what is? It's clearly an important part of parts b&c, but I don't know what it is, what it does, how it affects the problem, etc. Please help me understand those things.

-I follow what's going on in the first line of part b, but other than that the rest of the explanation is completely unclear to me. Please give a highly detailed explanation helping me to understand what is going on in each step and how they got the answer. I asked some specific questions, but please include other detailed info to help me understand what's going on. I'm completely lost in the explanation so there's a lot going on I probably don't even know to ask about.

Part C

- I don't understand this explanation at all. Please give a detailed explanation of what's going on in part c and how they found the answer.

IMPORTANT: If you're going to write please make sure your writing is easily readable/highly legible  

8. (+4) Applications of the concepts of covariance and correlation have been extremely important in the field of finance. The

as Rate ans E (2x) 22 E(x) =21 v (2 x)2 822 VIX) 2 4 12) = 4 E(X+Y) = E(X)+E (G) = 2M. So, E (X+Y) 2f18) = 2M a constant. V(X

0 0
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Answer #1

a) E (2X)= 2E(X)=24 Var (2x) = 4 Var (X)= 4 [since, Ver (X)=1 given] b) E(X+Y) = E(X)=E(Y) = 24 Var (X+Y) = V(X) + V (Y) +2 (c) E(X+Y) = 24 = E(2x) | We just saw, didnt we??). so, me go with V(X+Y)< V(2x) I both of the 2 me ar, 2(110) 54, calculated

Hope this helps.

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