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Calculate the portfolio risk

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1. If you were going to make a portfolio of two different stocks (50 percent of each in the portfolio). Why can't you usually take the weighted average of the two individual stock's standard deviations to calculate the portfolio risk?

2. Why does the average 2-stock portfolio give you the same expected return as the average 1-stock portfolio?

3. Why does the average 2-stock portfolio give you lower risk than the average 1-stock portfolio?

Reference no: EM132685927

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