Solved

Which One of the Following Statements Is Correct Concerning the Standard

Question 86

Multiple Choice

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:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q81: Share A has an expected return of

Q82: For a highly diversified equally weighted portfolio

Q83: The market risk premium is computed by:<br>A)adding

Q84: The expected return on a share that

Q85: According to the Capital Asset Pricing Model:<br>A)the

Q87: Which one of the following shares

Q89: The equity of Big Joe's has a

Q90: If a share portfolio is well diversified,

Q91: When shares with the same expected return

Q268: Which one of the following is an