Which One of the Following Statements Is Correct

question 27

Multiple Choice

Which one of the following statements is correct?

• A)A portfolio variance is a weighted average of the variances of the individual securities which comprise the portfolio.
• B)A portfolio variance is dependent upon the portfolio's asset allocation.
• C)A portfolio variance is unaffected by the correlations between the individual securities held in the portfolio.
• D)The portfolio variance must be greater than the lowest variance of any of the securities held in the portfolio.
• E)The portfolio variance must be less than the lowest variance of any of the securities held in the portfolio.

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Definitions:

Subordinate Search

The process undertaken by employees or individuals lower in a hierarchy seeking out information, often to support decision-making or problem-solving efforts.

Perceived Risk

The level of risk that a consumer believes exists when purchasing a product or service, affecting their decision-making process.

Functional Risk

Relates to the possibility that a product or service may not perform as expected, leading to dissatisfaction or potential loss for the consumer.

Practical Consumer

An individual who prioritizes functionality, value, and necessity over luxury or brand prestige when making purchasing decisions.