Empirically, a Comparison of the Distribution of Historical Returns for a Large

question 43

Multiple Choice

Empirically, a comparison of the distribution of historical returns for a large portfolio of randomly selected stocks (say, 50 stocks) with the distribution of historical returns for an individual stock in the portfolio has indicated a curious relationship in that it can be common to find ________.

• A) that the standard deviation of return for the individual stocks in the portfolio is considerably smaller than that of the portfolio.
• B) that the average return of an individual stock is less than the portfolio return.
• C) that the return for all individual stocks in the portfolio is each considerably larger than that of the portfolio itself.
• D) that the standard deviation of return for the portfolio is always zero.

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Definitions:

Medicalization

The process by which human conditions and problems come to be defined and treated as medical issues, often subject to medical study, diagnosis, and treatment.

Sociological Criticism

The analysis of social features of literature, art, or society, highlighting the relationships between the content or structure and the societal context.

Deviance

Refers to behaviors or actions that violate social norms or expectations, often leading to negative judgement from others.

Symbolic Interactionist

A perspective in sociology that focuses on the meanings individuals impart to actions and symbols in the context of social interactions.