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True regarding probability distributions

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Reference no: EM131893900

1. Which of the following is correct?

The expected return of a stock portfolio is the weighted average of the expected returns of the stocks in the portfolio.

The standard deviation of the returns of a portfolio is the weighted average of the standards deviations of the assets in the portfolio.

The standard deviation of the returns of a portfolio is less than the weighted average of the standards deviations of the assets in the portfolio if ρ < 1.

The beta of a portfolio is less than the weighted average of the betas of the assets in that portfolio.

More than one of the answers are correct.

2. Which of the following is true regarding probability distributions?

The flatter the probability distribution, the less risk is involved.

The returns of a Treasury bond have a vertical line for a probability distribution.

The returns of a Treasury bond have a horizontal line for a probability distribution.

The further away something is from the mean, the more likely it is to occur.

None of the answers are correct.

Reference no: EM131893900

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