The ____ of a Portfolio of Two or More Securities

question 84

Multiple Choice

The ____ of a portfolio of two or more securities is equal to the weighted average of the ____ of each of the individual securities in the portfolio.

• A) standard deviation; standard deviation
• B) risk; risk
• C) expected return; expected return
• D) standard deviation; risk

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Definitions:

Compensating Differentials

Wage differentials that compensate workers for the job attributes, such as difficulty level or undesirable conditions, indicating the premium required to attract workers to these positions.

Marginal Productivity Theory

A principle that describes how the addition of a unit of labor or capital increases output, holding other factors constant.

Unequal Distribution

A situation where resources, wealth, or opportunities are not evenly shared among members of a society.

Median Earnings

The midpoint of income distribution, meaning that half of the workers earn more than this amount and half earn less.