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Question : Question The standard deviation of a portfolio

Question

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

A. a risky asset in the portfolio is replaced with U.S. Treasury bills.

B. one of two stocks related to the airline industry is replaced with a third stock that is unrelated to the airline industry.

C. the portfolio concentration in a single cyclical industry increases.

D. the weights of the various diverse securities become more evenly distributed.

E. short-term bonds are replaced with Treasury Bills.

 

 

A. a risky asset in the portfolio is replaced with U.S. Treasury bills.

 

 

B. one of two stocks related to the airline industry is replaced with a third stock that is unrelated to the airline industry.

 

 

C. the portfolio concentration in a single cyclical industry increases.

 

 

D. the weights of the various diverse securities become more evenly distributed.

 

 

E. short-term bonds are replaced with Treasury Bills.

 

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