he 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.

2 points

Question 13