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the standard deviation of the portfolio's return is lower than those of the two securities, A...

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Finance

the standard deviation of the portfolio's return is lower thanthose of the two securities, A and B. What is the intuition behindthis? Is it always the case? Examine how the returns on these twosecurities behave. Do they move together or in oppositedirections?

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The standard deviation of the portfolios return made up off by two risky securities will always be lower than individual securitys standard deviation This happens as the risk is    See Answer
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