For a portfolio of N-stocks, the formula for portfolio variance contains A)N covariance terms. B)N(N - 1)/2 different covariance terms. C)N² covariance terms. D)N - 1 covariance terms.

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The formula for portfolio variance includes the squared weights of each stock, the variance of each stock, and the covariance between each pair of stocks. Since there are N stocks in the portfolio, there are N variance terms and N(N-1)/2 covariance terms.

For a Portfolio of N-Stocks, the Formula for Portfolio Variance