matrix

In R a matrix is an atomic vector with the dimension attribute. In this example, the correlation matrix is entered as a vector with sixteen elements: rho_v ＜-c(1.000, ...). Then the vector is translated into a matrix with rho ＜- matrix(rho_v, nrow = 4, ncol =4). Now it is a matrix because it has...

I was looking at this specific 2-asset portfolio example and noticed that BT uses the matrix formula to get the variance of P. What I'm confused about is why do you not use the variance formula: variance = X1^2*stddev(asset1)^2 + X2^2*stddev(asset2)^2 +...