While the Portfolio Return Is a Weighted Average of Realized

question 28

True/False

While the portfolio return is a weighted average of realized security returns, portfolio risk is not necessarily a weighted average of the standard deviations of the securities in the portfolio. It is this aspect of portfolios that allows investors to combine stocks and actually reduce the riskiness of a portfolio.

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Definitions:

Facilitated Transport

A process of passive transport, mediated by carrier proteins, that allows substances to move across cell membranes without expending energy.

Active Transport

The movement of molecules across a cell membrane from a lower to a higher concentration, requiring energy.

Mitochondria

Organelles within cells that are the sites of aerobic respiration, providing energy for cellular functions.

Concentration Gradient

A variation in the concentration of a substance across a distance, leading to the movement of particles from an area of high concentration to one of lower concentration.