If the Standard Deviation of a Diversified Portfolio Is 20

question 63

Multiple Choice

If the standard deviation of a diversified portfolio is 20% and if the stocks in that portfolio are positively correlated,then what would we expect the average standard deviation of stocks in that portfolio to be?

• A) less than 20%
• B) 20%
• C) greater than 20%
• D) you would need to know the percentage of each stock invested in that portfolio to determine the answer

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Definitions:

Source Objections

The reasons or arguments against a proposition or plan, originating from specific sources or stakeholders.

Present Supplier

The current provider of goods or services to a customer, against whom potential new suppliers are competing.

Money Objection

A price-oriented objection.

Purchase

The act of buying goods or services, involving an exchange of money for the desired item.