Which One of the Following Statements Is Correct Concerning the Standard

question 70

Multiple Choice

Which one of the following statements is correct concerning the standard deviation of a portfolio?

• A)Standard deviation is used to determine the amount of risk premium that should apply to a portfolio.
• B)The greater the diversification of a portfolio,the greater the standard deviation of that portfolio.
• C)Standard deviation measures only the systematic risk of a portfolio.
• D)The standard deviation of a portfolio can often be lowered by changing the weights of the securities in the portfolio.
• E)The standard deviation of a portfolio must equal the weighted average of the standard deviations of the individual securities held within the portfolio.

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