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The Variance of the Sum of Two Investments Will Be

question 57

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The variance of the sum of two investments will be equal to the sum of the variances of the two investments when the covariance between the investments is zero.


Definitions:

Learning Curve Calculations

Mathematical modeling of the rate at which performance improves, or costs decrease, as a function of experience or production volume.

Logarithmic Approach Formula

A mathematical method that uses logarithms to solve problems or equations, often applied in growth calculations or when dealing with rapidly increasing or decreasing quantities.

Exponent

A mathematical notation indicating the number of times a number, known as the base, is multiplied by itself.

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