You have a portfolio of 4 stocks with equal shares invested in each stock. Variances of individual stocks are the same and equal to ²=16. Correlations between each pair of stocks is rho

a)What would be the covariances between each pair of stocks as function of rho.

b)Find the variance of equally weighted portfolio of these 4 stocks as a function of rho

c)What happens to the variance of your portfolio when rho increases.

d)What would be the variance of your portfolio when rho=1.Would it be larger or smaller than the variance of individual stocks ²=16