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Consider an equally weighted portfolio of stocks in which each stock has a volatility of 42%, and the correlation between each pair of stocks is
Consider an equally weighted portfolio of stocks in which each stock has a volatility of 42%, and the correlation between each pair of stocks is 25%. a. What is the volatility of the portfolio as the number of stocks becomes arbitrarily large? b. What is the average correlation of each stock within this large portfolio? a. What is the volatility of the portfolio as the number of stocks becomes arbitranily large? The volatility of the portfolio as the number of stocks becomes arbitrarily large is % Round tot o decimal places b. What is the average correlation of each stock within this large portfolio? The average correlation of each stock within this large portfolio is % Round to two decimal places
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