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Basic Question 4 of 23

The ______ the dispersion around the mean, the ______ the risk.

I. greater; lower
II. greater; greater
III. lower; lower
IV. lower; greater

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Lina

Lina

Learning Outcome Statements

calculate and interpret the mean, variance, and covariance (or correlation) of asset returns based on historical data

calculate and interpret portfolio standard deviation

describe the effect on a portfolio's risk of investing in assets that are less than perfectly correlated

CFA® 2025 Level I Curriculum, Volume 2, Module 1.