Riskiness of portfolios

The riskiness of portfolios should be looked at in a different way than the riskiness of individual assets. Explain.

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The riskiness of portfolios should be looked at in a different way than the riskiness of individual assets since the weighted average of the standard deviations of returns of an individual asset does not affect the standard deviation of a portfolio containing the assets. The reduction in the returns fluctuations of portfolios is known as the diversification effect.

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