Question
How does the relationship between the average return and the historical volatility of individual stocks differ from the relationship between the average return and the
How does the relationship between the average return and the historical volatility of individual stocks differ from the relationship between the average return and the historical volatility of large, well-diversified portfolios?
A. Lower returns are always associated with low volatilities
B. Indvidual stocks with higher returns have higher volatilities. For large portfolios no clear relationships exist
C. Larg portfolios with higher returns have higher voltalities For indvidual stocks no clear relationships exist
D. For small stocks and small portfolios there is a clear relationship higher returns are associated with higher voltalities However with large stocks and large portfoloios there are not relationship between returns and voltalities
E. There is no clear relationship between returns or voltalities for individual stocks or large portfolios
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started