Question 41 If an investor can hold a portfolio of almost infinite number...
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Finance
Question 41
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If an investor can hold a portfolio of almost infinite number of assets, is there a certain type of risk of the portfolio that matters the most to the investor (assuming all the assets are equal-weighted in the portfolio)
Both volatility of each asset and the covariance between assets are equally important
The relative importance of volatility and covariance risks depends on the average return of each asset
Average volatility of each asset
Covariance between assets
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