You are given that a set of stocks has volatility 0.25 and pairwise correlation 0.35. A portfolio is constructed with equal weights for the stocks. How many stocks are needed in this portfolio to get a volatility below 0.3?
You are given that a set of stocks has volatility 0.25 and pairwise correlation 0.35. A portfolio is constructed with equal weights for the stocks. How many stocks are needed in this portfolio to get a volatility below 0.3?
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![You are given that a set of stocks has volatility 0.25 and pairwise
correlation 0.35. A portfolio is constructed with equal weights for the stocks. How many
stocks are needed in this portfolio to get a volatility below 0.3?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F690b93c1-a36f-4ba6-8aab-a0d4b7e86b05%2F77d16938-75a0-40fd-8463-ef21b806743a%2Fkexhimf_processed.png&w=3840&q=75)
Transcribed Image Text:You are given that a set of stocks has volatility 0.25 and pairwise
correlation 0.35. A portfolio is constructed with equal weights for the stocks. How many
stocks are needed in this portfolio to get a volatility below 0.3?
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