The Standard Deviation of a Portfolio Will Tend to Increase

question 56

Multiple Choice

The standard deviation of a portfolio will tend to increase when:

• A) a risky asset in the portfolio is replaced with Treasury bills.
• B) short-term bonds are replaced with Treasury Bills.
• C) the portfolio concentration in a single cyclical industry increases.
• D) the weights of the various diverse securities become more evenly distributed.

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Definitions:

Data Analysis

The process of systematically examining and evaluating data to extract meaningful insights or conclusions.

Introduction

The initial section of a document or speech that sets the context, presents the main idea, and outlines what is to follow.

Manipulative

Employing deceptive or indirect tactics to influence or control others for personal advantage.

Secondary and Primary Data

Types of information where primary data is collected directly for a specific research purpose, and secondary data is previously collected information used for a new analysis.