The Standard Deviation of a Portfolio of Risky Securities Is

question 19

Multiple Choice

The standard deviation of a portfolio of risky securities is

• A)the square root of the weighted sum of the securities' variances.
• B)the square root of the sum of the securities' variances.
• C)the square root of the weighted sum of the securities' variances and covariances.
• D)the square root of the sum of the securities' covariances.
• E)none of the above.

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Definitions:

Descriptive Words

Words that are used to describe or give more information about a noun or pronoun.

Same Density

A condition where two substances have an equal mass-to-volume ratio.

Fault

A fracture along which the adjacent rock surfaces are displaced parallel to the fracture.

Rock Layers

Horizontal strata of rocks, each layer typically representing a period of deposition in Earth's geological history.