The Variance of a Portfolio of Risky Securities

question 8

Multiple Choice

The variance of a portfolio of risky securities

• A)is a weighted sum of the securities' variances.
• B)is the sum of the securities' variances.
• C)is the weighted sum of the securities' variances and covariances.
• D)is the sum of the securities' covariances.

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Definitions:

Statute of Frauds

A legal concept that requires certain types of contracts to be executed in writing and signed by all parties involved, to be enforceable.

Oral Contract

An oral contract is an agreement between two or more parties that is spoken and not written down, yet is legally binding.

Convey the Deed

The act of transferring title of real property from one person or entity to another through a legal document.

Parol Evidence Rule

A rule in contract law that prevents parties from presenting extrinsic evidence of prior or contemporaneous agreements to alter or contradict the terms of a written contract.