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.

---

Definitions:

Seldom Resist Change

This phrase implies an unusual tendency or situation where individuals or groups infrequently oppose or challenge alterations in their environment or standard procedures.

Moderate Identity Gap

The state in which there is a discernible but not overwhelming difference between an individual's personal identity and their perceived social identity.

Acceptance of Change

The willingness or ability of individuals and organizations to adapt to new conditions, innovations, or transformations.

Unfreezing

The initial stage in the change process where existing patterns are destabilized or questioned to prepare for the introduction of new ways of functioning.