Which One of the Following Statements Is Correct Concerning the Standard

Multiple Choice

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 must equal the weighted average of the standard deviations of the individual securities held within the portfolio.