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QUESTION
When would a portfolio's variance be equal to the weighted average of the variances of the assets in the portfolio?
- A. Only when the portfolio is very well diversified.
- B. Only when the portfolio's asset returns are perfectly positively correlated.
- C. Never- the portfolio variance is always less than the weighted average of variances of the assets within the portfolio.
- D. Only when markets are strong-form efficient.
- E. Only when each asset is given equal weight in the portfolio.
