Any idea why the author is saying that adding FI to Equity portfolio will increase the risk in short term…is it because the Tracking error will rise or any other reason?
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Both…Tracking Error will increase since the same would track the S and P 500 index and secondly, the predictability of Correlation ( low correlation) between Equity and Fixed Income in the short term is uncertain.