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Basic Question 22 of 23
As the number of securities in a portfolio is increased, what happens to the average portfolio standard deviation?
B. It decreases at an increasing rate.
C. It decreases at a decreasing rate.
A. It increases at a decreasing rate.
B. It decreases at an increasing rate.
C. It decreases at a decreasing rate.
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
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® 2024 Level I Curriculum, Volume 2, Module 1.