Answer the following two questions about portfolio risk and return. Assume all weights are positive.
1) Can the return of a portfolio ever be lower than the lowest return on an individual security in the portfolio?
2) Can the variance of a portfolio ever be lower than the lowest variance of an individual security in the portfolio?
A) 1) yes; 2) yes
B) 1) yes; 2) no
C) 1) no; 2) yes
D) 1) no; 2) no
E) 1) maybe; 2) no

Question

Answer the following two questions about portfolio risk and return. Assume all weights are positive.
 1) Can the return of a portfolio ever be lower than the lowest return on an individual security in the portfolio?
2) Can the variance of a portfolio ever be lower than the lowest variance of an individual security in the portfolio?
A) 1) yes; 2) yes
B) 1) yes; 2) no
C) 1) no; 2) yes
D) 1) no; 2) no
E) 1) maybe; 2) no

Quizplus · Accepted Answer

The Answer of Answer the following two questions about portfolio risk and return. Assume all weights are positive.
 1) Can the return of a portfolio ever be lower than the lowest return on an individual security in the portfolio?
2) Can the variance of a portfolio ever be lower than the lowest variance of an individual security in the portfolio?
A) 1) yes; 2) yes
B) 1) yes; 2) no
C) 1) no; 2) yes
D) 1) no; 2) no
E) 1) maybe; 2) no

Answer the Following Two Questions About Portfolio Risk and Return