The Standard Deviation of a Portfolio Will Tend to Increase

Multiple Choice

The standard deviation of a portfolio will tend to increase when:

A) a risky asset in the portfolio is replaced with Treasury bills.
B) one of two shares related to the airline industry is replaced with a third share that is unrelated to the airline industry.
C) the portfolio concentration in a single cyclical industry increases.
D) the weights of the various diverse securities become more evenly distributed.
E) short-term bonds are replaced with long-term bonds.