What Is the Typical Relationship Between the Standard Deviation of an Individual

question 71

Multiple Choice

What is the typical relationship between the standard deviation of an individual common stock and the standard deviation of a diversified portfolio of common stocks?

• A) The individual stock's standard deviation will be lower.
• B) The individual stock's standard deviation will be higher.
• C) The standard deviations should be equal.
• D)There is no way to predict this relationship.

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Definitions:

Sphenoid

Wedge-shaped.

Appendicular Skeleton

The portion of the skeleton that includes the bones of the limbs and the supporting bone girdles (pectoral and pelvic) that connect them to the central body, or axial, skeleton.

Limbs

Extremities of the body used for movement and interaction with the environment, such as arms and legs in humans.

Girdles

Structures that connect the limbs to the axial skeleton, including the pelvic girdle and shoulder girdle.