Which of the following correlation coefficients would generate the most benefit in terms of risk reduction for a 2-asset portfol
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Answer:
Step-by-step explanation:
We have the two points: (0, 11) and (3, 50).
And we want to find the rate of change in y relative to x, where x is the gallons and y is the miles.
In simple terms, we want to find the slope between the two points.
So, let's use the slope formula:
Let (0, 11) be (x₁, y₁) and let (3, 50) be (x₂, y₂). Substitute. Let's also put "miles" in the numerator with the Ys and "gallons" in the denominator with the Xs. This yields:
Subtract and reduce:
And we're done!