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10) We can reduce volatility by investing in less than perfectly correlated assets through diversification because the expected return of a portfolio is the weighted
10) We can reduce volatility by investing in less than perfectly correlated assets through
diversification because the expected return of a portfolio is the weighted average of the expected returns of its stocks, but the volatility of a portfolio ________.
A) is higher than the weighted average volatility
B) is independent of weights in the stocks
C) is less than the weighted average volatility
D) depends on the expected return
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