Assume that each stock is equally weighted in each portfolio

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Create two stock portfolios, denoted A and B, each of which consists of ten (10) individual common stocks. Assume that each stock is equally weighted in each portfolio. Stocks in portfolio A must be from the same industry (at least the first two digits of each company’s SIC (Standard Industrial Classification) code must be the same) and stocks in portfolio B must be from ten different industries. In total, you have to choose 20 (or 19. if you include one of portfolio A’s stocks in portfolio B) different individual stocks.

Reference no: EM131026253

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