Arbor Systems and Gencore stocks both have a volatility of 49%. Compute the volatility of a portfolio with 50% invested in each stock if the correlation between the stocks is (a) + 1.0, (b) 0.50, (c) 0, (d) -0.50, and (e) -1.0. In which of the cases is the volatility lower than that of the original stocks?

If the correlation is +1.0, the volatility of the portfolio is __% If the correlation is 0.50, the volatility of the portfolio is __% If the correlation is 0, the volatility of the portfolio is __% If the correlation is -0.50, the volatility of the portfolio is __% If the correlation is -1.0, the volatility of the portfolio is __%

In which of the cases is the volatility lower than that of the original stocks?

A.) In cases (d) and (e). B.) In cases (b), (c), (d) and (e). C.) In all of the cases D.) In none of the cases