Portfolio Theory Flashcards
1
Q
Mean/expected value
A
is the central tendency
2
Q
Variance or Standard Deviation is the
A
dispersion
3
Q
systematic Risk
A
Economy Wide, All known as market or Non-diversifiable risk
4
Q
Idiosyncratic Risk
A
Only effects a small number of securities, Unique, Diversifiable, and Unsystematic
5
Q
diversification
A
This is the spreading of ones wealth among differing assets
6
Q
A portfolio is a group of
A
assets held by investors
7
Q
The return to a portfolio is
A
an average return of all the asset returns weighted by their relative amount invested in each asset.
8
Q
covariance
A
Measure of how two variables change together
9
Q
Correlation
A
This is the standardised Covariance
