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Expected return and standard deviation of equally weighted

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Suppose that the universe of available risky securities consists of a large number of stocks, identically distributed with E (r) of 15%, and a standard deviation of 60%, and a common correlation coefficient of 0.25

a. What are the expected return and standard deviation of an equally weighted risky portfolio of 25 stocks?

b. What is the smallest number of stocks necessary to generate an efficient portfolio with a standard deviation equal to or smaller than 23%?

Reference no: EM132622653

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