The Standard Deviation of a Portfolio Is Exactly Equal to the Average

question 15

True/False

The standard deviation of a portfolio is exactly equal to the average standard deviations of the individual stocks.

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Definitions:

Local Retailer

A business that sells products directly to consumers in a specific geographical area.

Cost of Goods Sold

The costs directly associated with manufacturing the products a company sells, such as materials and labor expenses.

Contribution Margin

The amount of revenue from sales that exceeds variable costs, indicating how much contributes to covering fixed costs and generating profit.

Fixed Costs

Expenses that do not change with the level of production or sales activity, such as rent and salaries.