When the correlation between SP500 and RBC increases to 0.8, it implies that if SP500 gains by 10%, then RBC will gain by 8%; and, if SP500 loses by 5%, then RBC will lose by 4%. When the correlation between SP500 and RBC decreases to -0.8, it implies that if SP500 gains by 10%, then RBC will lose by 8%; and, if SP500 loses by 5%, then RBC will gain by 4%.

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Answered 2 days After Nov 12, 2021

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Kamalika answered on Nov 15 2021

114 Votes

When the co
elation between SP500 and RBC increases to 0.8, it implies that if SP500 gains by 10%, then RBC will gain by 8%; and, if SP500 loses by 5%, then RBC will lose by 4%.
When the co
elation between SP500 and RBC decreases to -0.8, it implies that if SP500 gains by 10%, then RBC will lose by 8%; and, if SP500 loses by 5%, then RBC will gain by 4%.
    S&P500 Proportion
    RBC Proportion
    S&P...

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