Which Two of the Statements Are Correct

question 31

Multiple Choice

Which two of the statements are correct?

• A) For perfectly positive correlated investments portfolio standard deviation is equal to the weighted average of the standard deviation of the constituent investment.
• B) For perfectly negatively correlated investments portfolio standard deviation is equal to the weighted average of the standard deviation of the constituent investment.
• C) Portfolio standard deviation is usually greater than the weighted average of the standard deviation of the constituent investments.
• D) Portfolio standard deviation is usually less than the weighted average of the standard deviation of the constituent investments.

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Definitions:

Water Jar Study

A set of cognitive psychology experiments that assess problem-solving abilities and the influence of mental set on participants' approaches to solving problems.

Analogous Problem

A problem that shares similar features with another problem, allowing solutions or insights from one to inform the other.

Problem Solving

The process of working through details of an issue to reach a solution, often involving analytical or creative techniques.

Productive Restructuring

The cognitive process of reorganizing one’s understanding of a given subject to make the learning process more efficient.