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The standard deviation of a portfolio's return is lower than those of the two securities, A and B. What is the intuition behind this? Is it always

The standard deviation of a portfolio's return is lower than those of the two securities, A and B. What is the intuition behind this? Is it always the case? Examine how the returns on these two securities behave. Do they move together or in opposite directions?

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The return of a portfolio is calculated by getting the weighted average of returns of the portfolio’s component assets and... View the full answer

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