Which of the Following Statements Is True Regarding Time Diversification

question 81

Multiple Choice

Which of the following statements is true regarding time diversification?
I.The standard deviation of the average annual rate of return over several
Years will be smaller than the one-year standard deviation.
II.For a longer time horizon,uncertainty compounds over a greater number
Of years.
III.Time diversification does not reduce risk.

• A) I only
• B) II only
• C) II and III only
• D) I, II and III
• E) None of the statements are correct

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