Consider an equally weighted portfolio of stocks in which each stock has a volatility of 50%, and

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Consider an equally weighted portfolio of stocks in which each stock has a volatility of 50%, and the correlation between each pair of stocks is 24%.

a. What is the volatility of the portfolio as the number of stocks becomes arbitrarily large?

b. What is the average correlation of each stock with this large portfolio?

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Corporate Finance The Core

ISBN: 9781292431611

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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Question Posted: Jul 31, 2024 09:00 AM

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Consider an equally weighted portfolio of stocks in which each stock has a volatility of 50%, and

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Corporate Finance The Core

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