Which one of the following statements is correct concerning the standard deviation of a portfolio?
A) The greater the diversification of a portfolio, the greater the standard deviation of that
Portfolio.
B) The standard deviation of a portfolio can often be lowered by changing the weights of the
Securities in the portfolio.
C) Standard deviation is used to determine the amount of risk premium that should apply to a
Portfolio.
D) Standard deviation measures only the systematic risk of a 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:
Verified
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