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A potential investor compares the standard deviations of individual common stocks to the standard deviations of diversified portfolios of common stocks. What is the most
A potential investor compares the standard deviations of individual common stocks to the standard deviations of diversified portfolios of common stocks. What is the most likely conclusion reached by this investor?
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The individual stock's standard deviation is typically lower.
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The individual stock's standard deviation is typically higher.
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The standard deviations should be equal.
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There is no relationship.
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