Suppose that all assets in a portfolio have common standard deviation and common correlation as...

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Suppose that all assets in a portfolio have common standard deviation and common correlation as follows. 1 0% = 702 + + N-1 N -po2 Which of the following statements is true? B The lower risk limit on a diversified portfolio depends on the common standard deviation Individual assets and diversified portfolios have the same variance A diversified portfolio's unique and market risks are equal if peo No idiosyncratic risk will exist if p-1 ID 5 Hint: Chapter 13. Assignment 2 Question 3 7 3 1

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