n NISM Certifications
X NISM Series X
Medium

The relationship between risk and portfolio characteristics is such that __________.

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Higher risk portfolios have greater standard deviation

    Correct answer

  2. B

    Lower risk portfolios have greater correlation among securities

  3. C

    Higher risk portfolios have lower standard deviation

  4. D

    Risk is unrelated to standard deviation

Why this is the answer

Standard deviation measures volatility; higher deviation indicates higher risk.

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