Which one of the following statements is correct concerning the standard deviation of a portfolio?
A) Standard deviation is used to determine the amount of risk premium that should apply to a portfolio.
B) The greater the diversification of a portfolio,the greater the standard deviation of that portfolio.
C) Standard deviation measures only the systematic risk of a portfolio.
D) The standard deviation of a portfolio can often be lowered by changing the weights of the securities in the portfolio.
E) The standard deviation of a portfolio is equal to a weighted average of the standard deviations of the individual securities held within the portfolio.
Correct Answer:
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Q1: The expected return on a portfolio:
A)can be
Q14: Which one of the following is the
Q16: The principle of diversification tells us that:
A)concentrating
Q18: Standard deviation measures _ risk.
A)total
B)nondiversifiable
C)unsystematic
D)economic
E)systematic
Q19: The intercept point of the security market
Q20: Systematic risk is measured by:
A)beta.
B)the arithmetic average.
C)the
Q21: Assume you are looking at a security
Q22: Assume the risk-free rate and the market
Q39: Which one of the following would tend
Q47: A security that is fairly priced will
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