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How does the relationship between the average return and the historical volatility of individual stocks differ from the relationship between the average return and the historical volatility of large, well-diversified portfolios? . . . (Select the best choice below.) O A. Individual stocks with higher returns have higher volatilities. For large portfolios, no clear relationship exists. O B. Lower returns are always associated with low volatilities. O C. For small stocks and small portfolios there is a clear relationship. Higher returns are associated with higher volatilities. However, for large stocks and large portfolios, there is no relationship between returns and volatilities. O D. There is no clear relationship between returns and volatilities for individual stocks or large portfolios. O E. Large portfolios with higher returns have higher volatilities. For individual stocks, no clear relationship exists.

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How does the relationship between the average return and the historical volatility of individual stocks differ from the relationship between the average return and the historical volatility of large, well-diversified portfolios? (Select the best choice below.) O A. Individual stocks with higher returns have higher volatilities. For large portfolios, no clear relationship exists. OB. Lower returns are always associated with low volatilities. C. For small stocks and small portfolios there is a clear relationship. Higher returns are associated with higher volatilities. However, for large stocks and large portfolios, there is no relationship between returns and volatilities. D. There is no clear relationship between returns and volatilities for individual stocks or large portfolios. E. Large portfolios with higher returns have higher volatilities. For individual stocks, no clear relationship exists. How does the relationship between the average return and the historical volatility of individual stocks differ from the relationship between the average return and the historical volatility of large, well-diversified portfolios? (Select the best choice below.) O A. Individual stocks with higher returns have higher volatilities. For large portfolios, no clear relationship exists. OB. Lower returns are always associated with low volatilities. C. For small stocks and small portfolios there is a clear relationship. Higher returns are associated with higher volatilities. However, for large stocks and large portfolios, there is no relationship between returns and volatilities. D. There is no clear relationship between returns and volatilities for individual stocks or large portfolios. E. Large portfolios with higher returns have higher volatilities. For individual stocks, no clear relationship exists.

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The best choice is C For small stocks and small p... View the full answer