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Part 1: Assume that the average variance of return for an individual security is 50 and...

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Finance

Part 1: Assume that the average variance of return for anindividual security is 50 and that the average covariance is 10.What is the expected variance of an equally weighted portfolio of5,10,20,50, and 100 securities?

Part 2: In part 1, how many securities need to be held beforethe risk of a portfolio is only 10% more than minimum?

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Part 1 expected variance of an equally weighted portfolio 1no of securitiesaverage variance no of securities 1no of securitiesaverage covariance expected variance of an equally weighted portfolio of 5 securities    See Answer
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