The greater the variance of a portfolio,
A) The less certain the actual return
B) The lower the level of risk
C) The lower the expected return
D) The smaller the standard deviation
E) The greater the number of individual securities held

Question

Quizplus · Accepted Answer

Variance is a measure of the dispersion of returns around the expected return. The greater the variance, the wider the range of possible returns, making it less certain which return will actually be realized. Therefore, the answer is A.

The Greater the Variance of a Portfolio