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Business, 21.05.2020 20:01 420420blazee

Arbor Systems and Gencore stocks both have a volatility of 33%. 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, and (e) −1.00.

In which of the cases is the volatility lower than that of the original stocks?

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