Question: Suppose the typical technology stock has a return standard deviation of 50% per year. Suppose that all technology stocks are independent of each other. Suppose
Suppose the typical technology stock has a return standard deviation of 50% per year. Suppose that all technology stocks are independent of each other. Suppose that the typical blue-chip stock has a return standard deviation of 10% per year. Then, how many different technology stocks would I have to include in an equally weighted portfolio to make the tech stock portfolio safer (in terms of standard deviation) than holding a single blue-chip stock?
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