Suppose that the random variables are identically distributed, with mean and variance , but not independent. Assume that the correlation between any pair is equal to . That is the for does not equal to .
i) What is when ? Explain
ii) Use the result you have derived to comment on how small can be in this situation. Explain.
So I got
i) If , then I get
What would the reason be behind that? I know that if , then is there an explaination I can say about this?
for ii), I'm not quite sure how to approach this one. Can someone help me. All I know is that if \rho=0, then I will get the well-known result