If a Stock Portfolio Is Well Diversified,then the Portfolio Variance

question 34

Multiple Choice

If a stock portfolio is well diversified,then the portfolio variance:

• A)must be equal to or greater than the variance of the least risky stock in the portfolio.
• B)will be a weighted average of the variances of the individual securities in the portfolio.
• C)will equal the variance of the most volatile stock in the portfolio.
• D)may be less than the variance of the least risky stock in the portfolio.
• E)will be an arithmetic average of the variance of the individual securities in the portfolio.

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Definitions:

Philanthropic Giving

The act of donating money, goods, services, and time to support charitable causes and contribute to the welfare of others.

Fundraising Pyramid

A graphical representation used by nonprofits to illustrate the hierarchy of donor giving, starting from small individual donors at the base to major gifts at the top.

Giving Life Cycle

Stages through which an individual or entity passes as they become aware of, decide upon, and engage in philanthropic giving.

Charitable Remainder Trusts

A type of trust that provides a donor with income for a period of time, with the remaining assets going to charity upon the trust's termination.