The Standard Deviation of a Portfolio

question 54

Multiple Choice

The standard deviation of a portfolio:

• A) is a weighted average of the standard deviations of the individual securities held in the portfolio.
• B) can never be less than the standard deviation of the most risky security in the portfolio.
• C) must be equal to or greater than the lowest standard deviation of any single security held in the portfolio.
• D) is an arithmetic average of the standard deviations of the individual securities which comprise the portfolio.
• E) can be less than the standard deviation of the least risky security in the portfolio.

---

Definitions:

Insomnia

A sleep disorder characterized by difficulty falling and/or staying asleep, affecting overall health and quality of life.

Depression

An emotional health issue defined by an ongoing depressed state or absence of pleasure in tasks, which considerably hinders daily activities.

Psychological Disorders

Mental disorders characterized by patterns of thought, feeling, and behavior that are significantly distressing, deviant from cultural norms, and lead to impairment in functioning.

Substance Abuse

The adverse or perilous engagement with psychoactive substances, encompassing both alcohol and banned drugs.