If You Want to Know the Portfolio Standard Deviation for a Three-Stock

question 33

Multiple Choice

If you want to know the portfolio standard deviation for a three-stock portfolio, you will have to ________.

• A) calculate two covariances and one trivariance
• B) calculate only two covariances
• C) calculate three covariances
• D) average the variances of the individual stocks

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Definitions:

Feasible Terms

Conditions or parameters that are possible and practical to meet, often used in negotiations or agreements.

Constant Costs

Costs that do not change in total over a wide range of production activities or time periods.

Cost Ratios

The relationship between two elements of cost, showing how one cost compares to another, often used for analysis or efficiency assessment.

Production Possibilities Curves

A graphical representation showing the maximum number of goods or services that can be produced with limited resources.