Question
If stocks are randomly added to a diversified portfolio, will the value-weighted portfolio's beta approach 1 as the # of stocks added to portfolio increases?
If stocks are randomly added to a diversified portfolio, will the value-weighted portfolio's beta approach 1 as the # of stocks added to portfolio increases? Secondly, how does adding a stock that has a 0 correlation with your current portfolio affect portfolio diversification (does it change diversification?)
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Basic Finance An Introduction To Financial Institutions, Investments, And Management
Authors: Herbert B. Mayo
12th Edition
1337691011, 978-1337691017
