Consider an Equally Weighted Portfolio That Contains 100 Stocks

question 33

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) 0.72
• B) 0.59
• C) 0.40
• D) 0.50