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    P1.T4 Ch 6 Credit Risk & Capital Modeling

    Hi David, I am struggling to understand some concepts of ch 6. Please explain why in the formula of σp (portfolio standard deviation) you ignore the weight factor. It is known that the formula is (w1*σ1)^2+(w2*σ2)^2+2w1*w2*σ1*σ2*ρ. However, when you solve it you probably set w1=w2=w3=1, despite...