The Variance of Returns of a Portfolio of Loans Normally

question 9

True/False

The variance of returns of a portfolio of loans normally is equal to the arithmetic average of the variance of returns of the individual loans.

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Definitions:

Rosalie Rayner

An American psychologist known for her work with John B. Watson on the Little Albert experiment, demonstrating classical conditioning in humans.

Freudian Analysis

A psychotherapeutic approach developed by Sigmund Freud focusing on uncovering unconscious thoughts and motivations to treat psychopathologies.

Little Albert

An experimental subject in John B. Watson's study, demonstrating how emotions could be conditioned in humans.

Classical Conditioning

A learning process that involves creating associations between a naturally occurring stimulus and a previously neutral stimulus.