Question: a. How many variance terms and how many covariance terms do you need to calculate the risk of a 100-share portfolio? b. Suppose all stocks

a. How many variance terms and how many covariance terms do you need to calculate the risk of a 100-share portfolio?

b. Suppose all stocks had a standard deviation of 30 percent and a correlation with each other of .4. What is the standard deviation of the returns on a portfolio that has equal holdings in 50 stocks?

c. What is the standard deviation of a fully diversified portfolio of such stocks?

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