The Standard Deviation of a Portfolio

question 48

Multiple Choice

The standard deviation of a portfolio:

• A)is a measure of that portfolio's systematic risk.
• B)is a weighed average of the standard deviations of the individual securities held in that portfolio.
• C)measures the amount of diversifiable risk inherent in the portfolio.
• D)serves as the basis for computing the appropriate risk premium for that portfolio.
• E)can be less than the weighted average of the standard deviations of the individual securities held in that portfolio.

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Definitions:

Laissez-Faire

An economic philosophy advocating for minimal government intervention in the market and the economy, allowing businesses to operate with little to no government oversight.

Social Rights

Rights pertaining to the socioeconomic aspects of life, ensuring access to basic needs like education, health care, and livelihood.

Constitutional Monarchy

A form of government in which a monarch acts as the head of state within the parameters of a written or unwritten constitution, often sharing power with elected bodies.