What Is the Effect on Outcomes If a Portfolio Has

question 29

Multiple Choice

What is the effect on outcomes if a portfolio has statistically independent shares from two companies, and the expected returns are the same for both?

• A) The expected return is halved but the standard deviation remains constant.
• B) The expected return is the same but the standard deviation increases.
• C) The expected return doubles but the standard deviation remains constant.
• D) The expected return is the same but the standard deviation is reduced.

---

Definitions:

Common Carriers

Entities that offer transportation services to the public under the regulation of governmental authority.

Private Carriers

Refers to transportation service providers that operate only for the transportation of their own goods and products, as opposed to being hired by the general public.

Government License

An official permission granted by the government allowing individuals or entities to engage in certain activities or professions.

Artisan Lien

An Artisan Lien is a legal claim or right granted to craftsmen or laborers on the property they have improved or constructed as security for payment owed to them.