Consider an Equally Weighted Portfolio That Contains Five Stocks

question 97

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) 0.17
• B) 0.44
• C) 0.41
• D) 0.19

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