Multiple choice

Volatility of an equity fund portfolio is independent of the

  1. kind of stocks in the portfolio

  2. degree of diversification of the portfolio

  3. fund manager's success at market timing

  4. number of investors in the scheme
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A portfolio's volatility depends on what stocks it holds (A), how diversified it is (B), and the manager's market timing decisions (C). The number of investors (D) is irrelevant; thousands of investors can hold the same volatile portfolio.

Keep practicing — related questions