The standard deviation of the returns of a portfolio is the geometric average of the standard deviation of the returns of the individual assets in the portfolio is none of the other options is the square root of the expected return of the portfolio is the weighted average of the standard deviation of the returns of the individual assets in the portfolio is the simple average of the standard deviation of the returns of the individual assets in the portfolio costs

The standard deviation of the returns of a portfolio is the geometric average of the standard deviation of the returns of the individual assets in the portfolio is none of the other options is the square root of the expected return of the portfolio is the weighted average of the standard deviation of the returns of the individual assets in the portfolio is the simple average of the standard deviation of the returns of the individual assets in the portfolio costs

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter6: Risk And Return

Section: Chapter Questions

Problem 7MC: Explain correlation to your client. Calculate the estimated correlation between Blandy and...

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Similar questions

The expected return of a portfolio is simply the weighted average of the expected returns for the individual assets within the portfolio. Group of answer choices True False
True or false: The standard deviation of the portfolio is always equal to the weighted average of the standard deviations of the assets in the portfolio.
What is the standard deviation of the portfolio that invests equally in all three assets M, N, and O?
If a portfolio has a positive investment in every asset, can the standard deviation of the portfolio be less than sum of the individual asset's standard deviations in the portfolio? Explain
Beta is which of the following: A) standard deviation. B) total risk. C) Beta is the relationship which is between an investment's return, and the market return. D) unsystematic risk.
The expected rate of return of an investment ________. a. equals one of the possible rates of return for that investment b. equals the required rate of return for the investment c. is the mean value of the probability distribution of possible returns d. is the median value of the probability distribution of possible returns e. is the mode value of the probability distribution of possible returns
The contribution of an individual asset to the riskiness of a fully diversified portfolio depends primarily on which of the following? The covariance of the asset's return with the return of the rest of the portfolio The variance of the asset's return The covariance of the asset's return with the return on the riskless asset The skewness of the asset's return
a) Calculate the expected returns for both portfolios b) Calculate the standard deviation for portfolio A.
Is the portfolio risk the weighted average of the variance or covariance?
Which of the following measures reflects the excess return earned on a portfolio per unit of its systematic risk a. Treynor’s measure b. Sharpe’s measure c. Jensen’s measure d. Total measure
Consider two assets. Suppose that the return on asset 1 has expected value 0.05 and standard deviation 0.1 and suppose that the return on asset 2 has expected value 0.02 and standard deviation 0.05. Suppose that the asset returns have correlation 0.4.Consider a portfolio placing weight w on asset 1 and weight 1-w on asset 2; let Rp denote the return on the portfolio. Find the mean and variance of Rp as a function of w.
Mean returns for portfolios are calculated by taking the weighted average of the mean returns for each investment in the portfolio. Why won’t this approach work calculate the standard deviation of portfolio returns?