Standard deviation of diversified portfolio of common stocks

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Reference no: EM131067072

What is the typical relationship between the standard deviation of an individual common stock and the standard deviation of a diversified portfolio of common stocks?

A. There is no way to predicts this relationship

B. The standard deviations should be equal

C. Individual stocks standard deviation will be higher

D. Individual stocks standard deviation will be lower

Please explain your reasoning behind your answer

Reference no: EM131067072

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