Which One of the Following Statements Is Correct Concerning the Standard

question 9

Multiple Choice

Which one of the following statements is correct concerning the standard deviation of a portfolio?

• A)The greater the diversification of a portfolio,the greater the standard deviation of that portfolio.
• B)The standard deviation of a portfolio can often be lowered by changing the weights of the securities in the portfolio.
• C)Standard deviation is used to determine the amount of risk premium that should apply to a portfolio.
• D)The standard deviation of a portfolio is equal to the geometric average standard deviation of the individual securities held within that portfolio.
• E)The standard deviation of a portfolio is equal to a weighted average of the standard deviations of the individual securities held within the portfolio.

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Definitions:

Quasi-experimental Design

A research design that resembles an experimental design but lacks random assignment to control and experimental groups.

Process Evaluation

An assessment that aims to understand the dynamics of how a program or intervention was implemented and operated.

Pluralistic Ignorance

A social psychological phenomenon where a majority of group members privately reject a norm, but assume incorrectly that most others accept it.

False Uniqueness Effect

The cognitive bias causing individuals to underestimate the commonality of their desirable traits or behaviors, believing they are more unique than they actually are.