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1. What does a correlation of 1 indicate, what about-1, and what about 0? If our goal is to build a diversified stock portfolio why

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1. What does a correlation of 1 indicate, what about-1, and what about 0? If our goal is to build a diversified stock portfolio why is it important to invest in stocks that are not highly correlated? 2. How does standard deviation differ from beta? Which should we use if we are investing in one stock and have no other holdings? Which should we use if we hold a diversified portfolio? 3. Describe sensitivity and scenario analysis

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