Question: 1 - Diversification: True or False. Explain your answer. The variances of the individual assets in the portfolio are the most important characteristic in determining

1 - Diversification: True or False. Explain your answer.

The variances of the individual assets in the portfolio are the most important characteristic in determining the expected return of a well-diversified portfolio.

2 - If a portfolio has a positive investment in every asset, can the standard deviation on the portfolio be less than that on every asset in the portfolio? Explain.

3 - If a portfolio has a positive investment in every asset, what about the portfolio beta? Is the portfolio beta less than that of every asset in the portfolio?Explain.

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