Optimum number of stocks you need to hold in the portfolio

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Suppose that you have to hold at least 10 stocks and at most 50 stocks in your portfolio, and you are still trying to maximize the probability that you will be among the top three teams by the end of the trading period. What is the optimum number of stocks you need to hold in the portfolio? Would you prefer to have their returns highly correlated or uncorrelated? (Hint: Think about the effect of diversification on portfolio variance).

Reference no: EM131577621

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