We can reduce volatility by investing in less than


We can reduce volatility by investing in less than perfectly correlated assets through diversification because the expected return of a portfolio is the weighted average of the expected returns of its stocks, but the volatility of a portfolio ________.

A) is higher than the weighted average volatility

B) is independent of weights in the stocks

C) is less than the weighted average volatility

D) depends on the expected return

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Financial Management: We can reduce volatility by investing in less than
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