The standard deviation of a portfolio is a weighted average of the standard devi
ID: 2734288 • Letter: T
Question
The standard deviation of a portfolio
is a weighted average of the standard deviations of the individual securities held in that portfolio.
can be less than the weighted average of the standard deviations of the individual securities held in that portfolio.
measures the amount of diversifiable risk inherent in the portfolio.
is a measure of that portfolio's systematic risk.
serves as the basis for computing the appropriate risk premium for that portfolio..
is a weighted average of the standard deviations of the individual securities held in that portfolio.
can be less than the weighted average of the standard deviations of the individual securities held in that portfolio.
measures the amount of diversifiable risk inherent in the portfolio.
is a measure of that portfolio's systematic risk.
serves as the basis for computing the appropriate risk premium for that portfolio..
Explanation / Answer
The standard deviation of a portfolio is can be less than the weighted average of the standard deviations of the individual securities held in that portfolio.