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The standard deviation of a portfolio:
a. is a weighted average of the standard deviations of the individual securities held in the portfolio.
b. can never be less than the standard deviation of the most risky security in the portfolio.
c. is an arithmetic average of the standard deviations of the individual securities which comprise the portfolio.
d. can be less than the standard deviation of the least risky security in the portfolio.
e. must be equal to or greater than the lowest standard deviation of any single security held in the portfolio.

Answer :

Answer:

d. can be less than the standard deviation of the least risky security in the portfolio.

Explanation:

  • The modern portfolio theory is a mean-variance analysis and is the mathematical assessment of the portfolio of assessment such as the expected return and is maximized for a given set of risks and is by finding the weight of the first asset and then multiplying it by the variance of the assets and square of the variable of the second asset is multiplied by the second assets.

The standard deviation of a portfolio can be less than the standard deviation of the least risky security in the portfolio. Thus, option D is correct.

To measure the inherent votality of the investment, there has been the measurement of the standard deviation of a portfolio. The deviation has helped maintain the risk and the return to a portfolio.

The standard deviation according to the modern portfolio theory has been given to be less as compared to the standard deviation for least risky security. Thus, option D is correct.

For more information about the standard deviation, refer to the link:

https://brainly.com/question/13498201

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