1. Why do you square the deviations from the mean in one step of computing the standard deviation and then reverse it later by taking the square root?

(Select the best choice below.)

A.

This process eliminates negative signs to avoid matching negative surprises with positive surprises to mask volatility .

B.

This process allows you to practice using your calculator.

C.

This process standardizes the result to allow for comparisons across companies.

D.

This process is meant to confuse those who haven't taken finance.

2. True or False? It is possible to hold a portfolio where the risk of the whole portfolio is lower than the risk of any asset within it.