I got a kick out of this for some reason. Question ID#: 52450 Consider an equally-weighted portfolio comprised of seven assets in which the average asset variance equals 0.31 and the average covariance equals 0.27. What is the variance of the portfolio? A) 24.16%. B) 27.5%. C) 27.5%. D) 26.71%.

a? 7 * (1/7)^2 * .31 * 2 (since it is average asset variance) + 2 * (1/7)^2 * .27 * 2 (Avg asset covariance) = 170% / 7 = 24.16% CP

C (1/n)*var + {(n-1)/n}*cov (1/7)*.31 + {(7-1)/7}*.27 = .275714285 = 27.57% Edit: B or C haha, you had a 50% chance to get it right.

I’m stuck between B and C…I don’t know, they both look good.

I was half expecting to select B or C and then find out the answer was really: E) 27.6% or F) 27.57% sheesh, at least have the answer as one of the choices.