The Greater the Variance of a Portfolio

question 16

Multiple Choice

The greater the variance of a portfolio,

• A) The less certain the actual return
• B) The lower the level of risk
• C) The lower the expected return
• D) The smaller the standard deviation
• E) The greater the number of individual securities held

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Definitions:

Merchandising Entity

A type of business that purchases goods in a finished condition for the purpose of resale without further processing.

Conversion Costs

Denotes the aggregate costs of converting raw materials into finished goods, specifically comprising labor and manufacturing overhead expenses.

Professional Entities

Organizations that provide specialized services requiring a high degree of training and expertise, such as legal, medical, or accounting services.

Job Costing

A cost accounting method that accumulates costs individually for each job rather than for a set period of time.