Question: If the correlation between two stocks is 0.2, then a portfolio combining these two stocks in equal proportions will have a variance that is? a.

If the correlation between two stocks is 0.2, then a portfolio combining these two stocks in equal proportions will have a variance that is?

a. equal to the weighted average of the two individual variances.

b. greater than the weighted average of the two individual variances.

c. less than the weighted average of the two individual variances.

d. less than or equal to average variance of the two weighted variances, depending on other information.

e. none of the above

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