Which of the following is most likely correct for a diversified stock portfolio that exhibits a higher standard deviation than the market index?
A) The portfolio contains fairly aggressive stocks.
B) The portfolio's stock plot below the security market line.
C) The portfolio's beta is less than 1.0.
D) The portfolio contains a significant amount of unique risk.

Question

Quizplus · Accepted Answer

A diversified stock portfolio with a higher standard deviation than the market index likely contains fairly aggressive stocks, which tend to have higher volatility.

Which of the Following Is Most Likely Correct for a Diversified