Asked by
Stephanie Louster
on Oct 26, 2024
Verified
The standard deviation of the portfolio is larger if the covariance is negative.
Standard Deviation
A measure of the amount of variation or dispersion of a set of values, indicating how much the individual values in a dataset deviate from the mean.
Covariance
A measure of the degree to which two variables change together, indicating the direction of their linear relationship.
- Understand the impact of covariance on portfolio standard deviation.
Verified Answer
PF
Learning Objectives
- Understand the impact of covariance on portfolio standard deviation.
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