Suppose the average stock has a volatility of 50%, and the correlation between pairs of stocks is
Question:
Suppose the average stock has a volatility of 50%, and the correlation between pairs of stocks is 20%. Estimate the volatility of an equally weighted portfolio with
(a) 1 stock,
(b) 30 stocks,
(c) 1000 stocks.
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Muhammad Salman Alvi
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