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Suppose You Hold a Portfolio Consisting of a Single Stock

question 26

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Suppose you hold a portfolio consisting of a single stock. About how many more stocks would you need to add to your portfolio in order to reduce its average annual variability to about the level of average annual variability you would experience if you held a portfolio consisting of every stock listed on the New York Stock Exchange?


Definitions:

Patterns of Organization

Structured ways in which text or information is arranged and presented to enhance understanding and coherence.

Pro/con

A comparison that evaluates the advantages and disadvantages of a specific matter.

Chronological

Pertaining to the arrangement of events or elements in order of their occurrence in time.

Exclude Alternatives

The process of deliberately omitting or avoiding consideration of other options or choices.

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