Consider an Equally Weighted Portfolio That Contains Five Stocks

question 100

Multiple Choice

Consider an equally weighted portfolio that contains five stocks.If the average volatility of these stocks is 40% and the average correlation between the stocks is .5,then the volatility of this equally weighted portfolio is closest to:

• A).17.
• B).03.
• C).41.
• D).19.

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Definitions:

Observational Studies

Research methods where subjects are observed in their natural environment without any manipulation by the researcher.

Behavior of Chimpanzees

The range of activities and behaviors exhibited by chimpanzees, reflecting their complex social structures, communication methods, and intelligence.

Case Studies

Case studies are detailed examinations of a single subject or situation to explore its dynamics and draw conclusions applicable to similar contexts.

Experiments

A method of scientific investigation involving manipulation of variables to test a hypothesis and observe effects on a controlled environment or group.