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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
a. A portfolio is invested in a very large number of shares (n is large). The standard deviation of the residual return of any of these stocks is not so large as to overwhelm the rest of the portfolio. However, one-half of the portfolio is invested in stock 1, and the rest of the portfolio is equally divided among the other n - 1 shares. Is this portfolio well diversified?
b. Another portfolio also is invested in the same n shares, where n is very large. Instead of equally weighting with portfolio weights of 1/n in each stock, the weights in half the securities are 1.5/ n while the weights in the other shares are .5/n. Is this portfolio well diversified?
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