The ________ the Variance of Variability of Returns on a Portfolio,the

question 35

Multiple Choice

The ________ the variance of variability of returns on a portfolio,the more ________ the returns on the portfolio.

• A) Smaller, dangerous
• B) Smaller, diversified
• C) Larger, diversified
• D) Larger, uncertain

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Definitions:

Event B

An occurrence or outcome within a statistical experiment to which a probability can be assigned.

Mutually Exclusive

A characteristic of events that cannot occur at the same time, indicating a clear separation or distinction between them.

Collectively Exhaustive

A property of a set of events that ensures all possible outcomes are covered, leaving no possibility out.

Probability

A numerical measure of the likelihood of a specific event occurring, ranging from 0 to 1.