Which of the Following Statements Is Most Correct

question 13

Multiple Choice

Which of the following statements is most correct?

• A) The expected return on a portfolio of financial assets is equal to the summation of the products of the expected returns of the individual assets multiplied by the probability of each return being realized.
• B) When adding new securities to a portfolio,the higher or more positive the degree of correlation between the new securities and those already in the portfolio,the greater the benefits of the additional portfolio diversification.
• C) In portfolio analysis,we rarely use ex post (historical)returns and standard deviations,because we are interested in ex ante (future)data.
• D) Portfolio diversification reduces the variability of returns on each security held in the portfolio.
• E) All of the above statements are false.

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Definitions:

Resistance to Change

The reluctance or refusal to adapt to new methods, practices, or conditions within an organization or personal life.

Organizations

Groups or collectives of people structured and managed to meet a need or pursue collective goals on a continuing basis.

Common Reasons

Frequently encountered or widely accepted causes or justifications for an action or event.

Resist Change

The tendency of individuals or organizations to oppose or struggle against modifications to their current state or practices.