Why is the standard deviation on a portfolio

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Reference no: EM133322597

Question 1) A risk-averse investor currently holds low-risk shares in one company only. In what circumstances would it be wise to split the fund by purchasing shares in a high-risk and high-return share?

Question 2) Why is the standard deviation on a portfolio usually not a weighted average of the standard deviations of the constituent securities?

Question 3) How are the gains from diversification linked to correlation coefficients?

Reference no: EM133322597

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