The volatility of an individual stock is more than the volatility of a well-diversified portfolio of stocks.

Question

Quizplus · Accepted Answer

The volatility of an individual stock is influenced by its own unique factors such as company performance, management decisions, and external market forces. A well-diversified portfolio of stocks, on the other hand, includes a range of stocks from different companies and industries, which tend to have lower overall volatility due to the diversification. Therefore, the statement is true that the volatility of an individual stock is more than the volatility of a well-diversified portfolio of stocks.

The Volatility of an Individual Stock Is More Than the Volatility