Suppose you identify 10 possible investments whose payoffs are completely independent of one another. All the investments
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Suppose you identify 10 possible investments whose payoffs are completely independent of one another. All the investments have the same expected value and standard deviation. You have $1,000 to invest. In terms of risk, would the benefit of spreading your $1,000 across all 10 investments be the same, greater, or smaller compared with dividing your funds between just 2 investments?
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Money Banking And Financial Markets
ISBN: 9781260226782
6th Edition
Authors: Stephen Cecchetti, Kermit Schoenholtz
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