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Suppose that the average stock has a volatility of 43%, and that the correlation between pairs of stocks is 20%. Estimate the volatility of an
Suppose that the average stock has a volatility of
43%,
and that the correlation between pairs of stocks is
20%.
Estimate the volatility of an equally weighted portfolio with:a.
1
stockb.
30
stocksc.
1,000
stocks
Question content area bottom
Part 1
a. The volatility of an equally weighted portfolio with
1
stock is
enter your response here%.
(Round to two decimal places.)
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