A financial planner is examining the portfolios held by several of her clients. Identify which of the following portfolios is likely to have the smallest standard deviation: A portfolio containing Microsoft, Apple, and Google stock A portfolio containing only Microsoft stock A portfolio consisting of about three randomly selected stocks from different sectors

The answer is A portfolio consisting of about three randomly selected stocks from different sectors.

Explanation:

Standard deviation simply means the amount or the percentage that the portfolio may change in response to a shift in the market.

The best way to have a small standard deviation is by investing in different sectors rather than in one sector. This strategy is called diversification and it's a great way to mitigate risk.

a

b

b

a

c

b

d

d

none of these are correct, as they are all sources of american law

a

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