Can the Risk (Variance)of a Portfolio Ever Be Less Than

question 45

Multiple Choice

Can the risk (variance) of a portfolio ever be less than the smallest risk (variance) of an individual security in the portfolio?

• A) No. Yes.
• B) No. No.
• C) Yes. No.
• D) Yes. Yes.

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Definitions:

Late-Nineteenth Century

The period from 1871 to 1900, marked by industrial growth, colonial expansion, and significant cultural and political developments in the Western world.

Laws

Formal rules and principles established by a governing authority that regulate the behavior of individuals and organizations within a society.

Rerum Novarum

An encyclical issued by Pope Leo XIII in 1891, addressing the condition of the working classes and calling for the rights of workers to form unions, fair wages, and the responsibilities of the state and citizens.

Pope Leo XIII

The head of the Catholic Church and ruler of the Vatican City from 1878 to 1903, known for addressing social issues and promoting the study of Thomism.