Which One of the Following Statements Is Correct Concerning the Standard

question 122

Multiple Choice

Which one of the following statements is correct concerning the standard deviation of a portfolio?

• A) The greater the diversification of a portfolio, the greater the standard deviation of that portfolio.
• B) The standard deviation of a portfolio can often be lowered by changing the weights of the securities in the portfolio.
• C) Standard deviation is used to determine the amount of risk premium that should apply to a portfolio.
• D) Standard deviation measures only the systematic risk of a portfolio.
• E) The standard deviation of a portfolio is equal to a weighted average of the standard deviations of the individual securities held within the portfolio.

Understand the concept of indirect political risk.

Comprehend the notion of collateral damage.

Analyze the similarities between indirect political risk and collateral damage.

Develop critical thinking and articulation skills through essay writing.

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Definitions:

Summarization

The act of condensing information into a more compact form, retaining key elements.

Midpoint

The value that lies exactly in the middle between the highest and lowest values of a data set, often used in the calculation of class intervals.

Equal Share

A concept where a total amount or resource is divided equally among the participants or entities involved.

Measure Of Variability

A statistical metric used to describe the spread or dispersion of a set of data points.