标题: Correlation 1 in fully segmented market [打印本页] 作者: pawn 时间: 2011-7-11 19:00 标题: Correlation 1 in fully segmented market
There a reading in session 6 where we need to calculate equity risk premium of the market. We need to calculate the risk premium assuming it is fully segmented and integrated. My question is why would correlation=1 in a fully segmented market? Shouldnt it be 0作者: bboo 时间: 2011-7-11 19:00
In a fully segmented market, the correlation measured is between the local market portfolio for the country and the security. It is not the global portfolio and the security.
