Expected return on portfolio 2 Line (capital market line) II Y Line 35% in risk-free asset -40% in risk-free asset 65% in stocks represented by Q 140% in stocks represented by Q Risk-free rate (Rp) 70% in risk-free asset 30% in stocks represented by Standard deviation of portfolio's return Portfolio Q is composed of 30 percent AT&T, 45 percent GM, and 25 percent IBM.
Expected return on portfolio 2 Line (capital market line) II Y Line 35% in risk-free asset -40% in risk-free asset 65% in stocks represented by Q 140% in stocks represented by Q Risk-free rate (Rp) 70% in risk-free asset 30% in stocks represented by Standard deviation of portfolio's return Portfolio Q is composed of 30 percent AT&T, 45 percent GM, and 25 percent IBM.
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 20P
Question
Based on this image, how many stocks does it take to eliminate most of the diversifiable risk?
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