The standard deviation of a portfolio is a weighted average of the standard devi

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.

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