Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
M4
![As the number of securities in a portfolio is increased, what happens to the average
portfolio standard deviation?
a)
It first decreases rapidly, then starts to decrease slowly as more securities are
added.
b) It decreases at an increasing rate.
c) It increases at an increasing rate.
O d) It increases at a decreasing rate.
O e) It decreases at a constant rate.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0411a775-c15c-4d40-b7dc-64a00d217c00%2F742cb3ea-6404-4d80-8fcc-612b9741ce18%2F7kb0d6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:As the number of securities in a portfolio is increased, what happens to the average
portfolio standard deviation?
a)
It first decreases rapidly, then starts to decrease slowly as more securities are
added.
b) It decreases at an increasing rate.
c) It increases at an increasing rate.
O d) It increases at a decreasing rate.
O e) It decreases at a constant rate.
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