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.

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Definitions:

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