Karl Invested His Entire Portfolio in a Randomly-Selected, Single Stock

question 5

Multiple Choice

Karl invested his entire portfolio in a randomly-selected, single stock. Which of the following best approximates the standard deviation that Walter should expect for his portfolio?

• A) 10%
• B) 16%
• C) 20%
• D) 35%

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Definitions:

Public Policy

A governmental policy based on widely held societal values.

Legal Principles

Fundamental norms, rules, or doctrines that guide the practice of law and ensure fairness and justice in legal processes.

Stare Decisis

A legal doctrine that obligates courts to follow historical cases when making a ruling on a similar case.

Efficiency

The degree to which an entity effectively uses resources to achieve desired outcomes with minimal waste or effort.