Consider an Equally Weighted Portfolio That Contains 100 Stocks

question 18

Multiple Choice

Consider an equally weighted portfolio that contains 100 stocks.If the average volatility of these stocks is 50% and the average correlation between the stocks is .7,then the volatility of this equally weighted portfolio is closest to:

• A).72.
• B).63.
• C).40.
• D).50.

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Definitions:

Professional Robber

An individual who engages in theft or robbery as a primary occupation, often demonstrating skill, planning, and organization in executing crimes.

Too Much Risk

A situation where the level of danger or chance of failure is considered excessively high, potentially leading to undesired outcomes.

Shoplifters

Individuals who illegally take goods from a store without paying for them.

Designer Clothes

High-quality, often expensive, clothing made by or bearing the label of a well-known fashion designer.