Question: 5. How might your decision be affected if, rather than buying one stock for $0.8 million, you could construct a portfolio consisting of 100 stocks

5. How might your decision be affected if, rather than buying

5. How might your decision be affected if, rather than buying one stock for $0.8 million, you could construct a portfolio consisting of 100 stocks with $8,000 invested in each? Each of these stocks has the same return characteristics as the one stock - that is, a 50-50 chance of being worth zero or $19,200 at year-end. I. Investing in a portfolio of stocks would definitely be a deterioration over investing in the single stock. II. Investing in a portfolio of stocks would definitely be an improvement over investing in the single stock. III. The situation would be unchanged. -Select- Would the correlation between returns on these stocks matter? -Select

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