Question

A portfolio's risk is measured by its degree of volatility because the ________ volatile the returns, the ________ uncertain the future return on the portfolio.

A) more; more
B) more; less
C) less; more
D) None of the above

Answer 1

A portfolio's risk is measured by its degree of volatility because the more volatile the returns, the more uncertain the future return on the portfolio. correct answer is Option A

Step-by-step explanation:

A portfolio's risk is measured by its degree of volatility because the more volatile the returns, the more uncertain the future return on the portfolio.

When a portfolio experiences high levels of volatility, it means that its returns are fluctuating greatly over time. This indicates that the future returns of the portfolio are unpredictable and uncertain. On the other hand, a portfolio with low volatility has more stable returns and therefore, the future returns are more predictable and certain.

Therefore, the correct answer is Option A) more; more.