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Arbor Systems and Gencore stocks both have a volatility of 34 %. Compute the volatility of a portfolio with 50 % invested in each stock
Arbor Systems and Gencore stocks both have a volatility of 34 %. Compute the volatility of a portfolio with 50 % invested in each stock if the correlation between the stocks is (a ) plus 1.00 , (b ) 0.50 , (c ) 0.00 , (d ) negative 0.50 , and (e ) negative 1.00. In which of the cases is the volatility lower than that of the original stocks?
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