The risk of a portfolio is simply equal to the weighted average return of the securities that comprise it.

Name: The risk of a portfolio is simply equal to the weighted average return of the securities that comprise it.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The risk of a portfolio takes into account not only the weighted average return of the securities, but also their volatility or standard deviation, as well as how those securities tend to move in relation to each other (i.e. their correlation). Therefore, the statement is false.

The Risk of a Portfolio Is Simply Equal to the Weighted