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The average variance of the annual returns for a typical stock is 1500 and its average covariance with other stocks is 400. Based on this
The average variance of the annual returns for a typical stock is 1500 and its average covariance with other stocks is 400. Based on this information, calculate the standard deviation of returns for (1) a fully diversified portfolio; (2) a portfolio of 64 stocks; (3) a portfolio of 16 stocks; and (4) a portfolio of 4 stocks. Assume equal-sized holdings for each stock. All weights are 1/N
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The Everything Improve Your Credit Book
Authors: Justin Pritchard
1st Edition
1598691554, 978-1598691559
