Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 17, 2024

Which of the following regarding mean and standard deviation is correct? The mean of the return of a portfolio (with all positive portfolio weights that

Which of the following regarding mean and standard deviation is correct?

The mean of the return of a portfolio (with all positive portfolio weights that sum to 100%) could be higher than the highest mean return among the stocks in the portfolio.

The standard deviation of a portfolio could be lower than any of its component stock.

The standard deviation of a portfolio always equals to weighted average of the standard deviation of its component stocks.

The Sharpe ratio of a portfolio is always higher than that of its component stocks

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

Recommended Textbook for

Fundamentals Of Investments

Authors: Charles J. Corrado

3rd Edition

0072829192, 978-0072829198

Students also viewed these Finance questions

Question

62. A, B, and C are evenly matched tennis players. Initially A and B play a set, and the winner then plays C. This continues, with the winner always playing the waiting player, until one of the...

Answered: 1 week ago

Question

★★★★★

During its first year of operations, Spring Garden Plans earned revenue of $322,000 on account. Industry experience suggests that bad debts will amount to 2% of revenues. At December 31, 2012,...

Answered: 1 week ago

Question

★★★★★

n ! - n ^ 1 0 0 0 is O ( 2 ^ ( n + 1 ) ) true or false

Answered: 1 week ago

Question

★★★★★

Blue Spruce Company had $152,600 of net income in 2016 when the selling price per unit was $153, the variable costs per unit were $93, and the fixed costs were $573,300. Management expects per unit...

Answered: 1 week ago

Question

★★★★★

Now that you have learned about the murders of Gwen and Lawrence, answer the following questions. To what degree might an explanation of Gwen's murder lie in the "psychological functions" served by...

Answered: 1 week ago

Question

★★★★★

psychodynamic therapy with children principles emphasizes following the child this thought principle guides the therapy structure in all the following ways except: A. length is based on childs...

Answered: 1 week ago

Question

★★★★★

What are the challenges faced by workers all across the world as suburbanization expands and the distance traveled to the workplace increases? Can this be addressed through telecommuting and a more...

Answered: 1 week ago

Question

★★★★★

Case Study - Social-Emotional Development of Children Kathryn first used drugs knowingly when she was 12 years old. Her mother and uncle influenced her behaviour. She was only 16 when her daughter...

Answered: 1 week ago

Question

★★★★★

Taylor, a Scrum Master, was asked for their advice on how large a Scrum Team should be . . Which of these responses is correct? ? A ) ) The typical size of an effective Scrum Team is ten or fewer....

Answered: 1 week ago

Previous Question Next Question

		The mean of the return of a portfolio (with all positive portfolio weights that sum to 100%) could be higher than the highest mean return among the stocks in the portfolio.
		The standard deviation of a portfolio could be lower than any of its component stock.
		The standard deviation of a portfolio always equals to weighted average of the standard deviation of its component stocks.
		The Sharpe ratio of a portfolio is always higher than that of its component stocks