Arbor Systems and Gencore stocks both have a volatility of 40%. Compute the volatility of a portfolio with 50% invested in each stock if the correlation between the stocks is
(a?) +1.00?,
?(b?) 0.50?,
?(c?) 0.00?,
?(d?)−0.50?,
?(e?)−1.00.
In which of the cases is the volatility lower than that of the original? stocks?
If the correlation is +1.00?, the volatility of the portfolio is: