If one were to create a portfolio by randomly picking stocks and adding them to a portfolio, as the number of stock in the portfolio gets bigger and approaches infinity, the portfolios variance essentially should depend on the Multiple Choice variance of the first stock to enter the portfolio variance of the individual stock returns market risk premium covariances between the stock returns in the portfolio risk free rate used to construct the portfolio

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Question: If one were to create a portfolio by randomly picking stocks and adding them to a portfolio, as the number of stock in the portfolio

If one were to create a portfolio by randomly picking stocks and adding them to a portfolio, as the number of stock in the portfolio gets bigger and approaches infinity, the portfolios variance essentially should depend on the____________

Multiple Choice

variance of the first stock to enter the portfolio
variance of the individual stock returns
market risk premium
covariances between the stock returns in the portfolio
risk free rate used to construct the portfolio

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