A portfolio is invested in a very large number of shares ( n is large). The standard
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A portfolio is invested in a very large number of shares (n is large). The standard deviation of the residual return of any of these stocks is not so large as to overwhelm the rest of the portfolio. However, one-half of the portfolio is invested in stock 1, and the rest of the portfolio is equally divided among the other n – 1 shares. Is this portfolio well-diversified?
Related Book For
Corporate Finance Core Principles and Applications
ISBN: 978-0077905200
3rd edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
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