If a Stock Portfolio Is Well Diversified, Then the Portfolio

question 27

Multiple Choice

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

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

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Definitions:

Loyalty

A strong feeling of support or allegiance, often displayed by customers to brands or by employees to their employers.

Organization

An entity comprising multiple people, such as an institution or an association, that has a particular purpose.

Organizational Citizenship Behaviors

Organizational citizenship behaviors are the extras people do to go the additional distance in their work.

Extra Mile

Going beyond the required or expected effort or performance, often to achieve greater results or satisfaction.