--%>
Assignment Help - homework help

Why riskiness of portfolios is different to specific assets

Why the riskiness of portfolios ought to be looked at differently than the riskiness of specific assets?

The riskiness of portfolios ought to be looked at differently than the riskiness of individual assets since the weighted average of the standard deviations of returns of specific assets does not result in the standard deviation of a portfolio having the assets.  There is a reduction in the fluctuations of the returns of portfolios that is called the diversification effect.

   Related Questions in Finance Basics

  • Q : Modify-open market operations-switching

    Normal 0 false false

    		•
  • Q : Riskiness of portfolio with very low

    What happens to the riskiness of portfolio if assets along with very low correlations (even negative correlations) are combined? How successfully diversification decreases risk based on the degree of correlation among the two variables in questi

    		•
  • Q : Define Workload Workload : The

    Workload: The measurement of rises and reduces of inputs or demands for work, and an ordinary basis for projecting related budget requires for both established and new programs. This approach to BCPs is frequently viewed as an alternative to outcome o

    		•
  • Q : Explain three career opportunities in

    List and explain the three career opportunities in the field of finance.Finance has three main career paths: financial management, financial markets and institutions, and investments. Financial managem

    		•
  • Q : Size of the labour force net population

    Normal 0 false false

    		•
  • Q : Explain Fund Condition Statement Fund

    Fund Condition Statement: A budget display, comprised in the Governor’s Budget, shortening the operations of a fund for the past, present, and budget years. The display comprises the starting balance, previous year adjustments, loans, revenue, t

    		•
  • Q : Have mergers influenced competition

    Have mergers influenced competition?Federal Reserve data illustrates that measured on the local level, where competition takes place; markets have in fact experienced more banking competition, not less, in the past decade.

    		•
  • Q : Productivity growth in quantitative

    Normal 0 false false

    		•
  • Q : What is the efficiency factor Normal 0

    Normal 0 false false

  • Q : Pros and cons of commercial paper

    Describe pros and cons of commercial paper associated to bank loans for a company seeking short-term financing? Usually commercial paper is a cheaper source of short-term financing for a firm, compared to bank loans. Also, a larger amount of fu

    		•