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Consider an Equally Weighted Portfolio That Contains 100 Stocks

Question 18

Multiple Choice

Consider an equally weighted portfolio that contains 100 stocks.If the average volatility of these stocks is 50% and the average correlation between the stocks is .7,then the volatility of this equally weighted portfolio is closest to:


A) .72.
B) .63.
C) .40.
D) .50.

Correct Answer:

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