a. How many variance terms and how many covariance terms do you need to calculate the risk
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a. How many variance terms and how many covariance terms do you need to calculate the risk of a 100-share portfolio?
b. Suppose all stocks had a standard deviation of 30% and a correlation with each other of
.4. What is the standard deviation of the returns on a portfolio that has equal holdings in 50 stocks?
c. What is the standard deviation of a fully diversified portfolio of such stocks?
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