Arbor Systems and Gencore stocks both have a volatility of 40%. Compute the volatility of...
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Arbor Systems and Gencore stocks both have a volatility of 40%. Compute the volatility of a portfolio with 50% invested in each stock if the correlation between the stocks is
(a) +1.00,
(b) 0.50,
(c) 0.00,
(d)0.50,
(e)1.00.
In which of the cases is the volatility lower than that of the original stocks?
If the correlation is +1.00, the volatility of the portfolio is:
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