The Standard Deviation of a Portfolio Will Tend to Increase

question 56

Multiple Choice

The standard deviation of a portfolio will tend to increase when:

• A) a risky asset in the portfolio is replaced with Treasury bills.
• B) short-term bonds are replaced with Treasury Bills.
• C) the portfolio concentration in a single cyclical industry increases.
• D) the weights of the various diverse securities become more evenly distributed.

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Definitions:

Negative Reinforcers

Stimuli that, when removed after a particular behavior, increase the likelihood of that behavior being repeated in the future.

Cumulative Recorder

A device used in behavioral psychology to record the frequency of behaviors over time, creating a graphical representation.

Graphic Record

A visual representation of data or information, usually in the form of charts, graphs, or diagrams.

Reinforcement Contingencies

Conditions that determine when reinforcement will be given for a particular behavior, crucial in the process of learning and behavior modification.