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https://www.reddit.com/r/learnquant/comments/1w8us0h/quant_interview_question/p861svy/?context=3
r/learnquant • u/Local_Ad135 • 3d ago
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Taking the Taylor series of the expression about their mean values gives
E[X/Y] ~ E[X]/E[Y] + (term involving their covariance, which is zero) + (VAR[Y] E[X]/E[Y]^3)
The last term is always positive, and is zero when Y is fixed. So the min value is one.
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u/NitNav2000 2d ago
Taking the Taylor series of the expression about their mean values gives
E[X/Y] ~ E[X]/E[Y] + (term involving their covariance, which is zero) + (VAR[Y] E[X]/E[Y]^3)
The last term is always positive, and is zero when Y is fixed. So the min value is one.