Standard deviation not full formula being used

CFA Level I
#1

Hi!

Why doesn’t the author use the full formula? He leaves out the last part of the equation for some reason. Kaplan book 2 p19
Thanks in advance!

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#2

I guess I missed the longer formula which the later part uses only w1o1+w2o2

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#3

If the correlation coefficient = +1.0, then the variance becomes a perfect square, which allows you to state the standard deviation as W1σ1+ W2σ2.

1 Like
#4

Ah yeah thanks! I think I read to fast and don’t really think about the algebra/rewriting of the formulas some time. After thinking about it for like 15 min then I saw that I had missed the last part in the equation but thanks for the reply :)))