Question
(a) Briefly explain the concept of diversification. In your discussion, you should explain why the standard deviation of a portfolio of two securities can be
(a) Briefly explain the concept of diversification. In your discussion, you should explain why the standard deviation of a portfolio of two securities can be less than the weighted average of the standard deviations of the individual securities.
(b) Explain the differences between the capital market line and the security market line.
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ISE Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan Marcus
12th International Edition
1265450099, 9781265450090
