If a Share Portfolio Is Well Diversified, Then the Portfolio

question 90

Multiple Choice

If a share portfolio is well diversified, then the portfolio variance:

• A)will equal the variance of the most volatile share in the portfolio.
• B)may be less than the variance of the least risky share in the portfolio.
• C)must be equal to or greater than the variance of the least risky share in the portfolio.
• D)will be a weighted average of the variances of the individual securities in the portfolio.
• E)will be an arithmetic average of the variance of the individual securities in the portfolio.

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