The DEAR of a portfolio of assets is simply the weighted average of each individual assets' DEAR.

Question

Quizplus · Accepted Answer

DEAR (Daily Earnings at Risk) for a portfolio of assets is not simply the weighted average of each individual asset's DEAR because it also takes into account the correlation between the returns of those assets. The risk of a portfolio is affected by how the returns on the assets move together, not just their individual risks.

The DEAR of a Portfolio of Assets Is Simply the Weighted