-The tighter the probability distribution of its expected futurereturns, the greater the risk of a given investment as measured byits standard deviation.-Risk-averse investors require higher rates of return oninvestments whose returns are highly uncertain but most investorsare risk-neutral. -When adding a randomly chosen new stock to an existingportfolio, the lower (or less positive) the degree of correlationbetween the new stock and stocks already in the portfolio, the lessthe additional stock will reduce the portfolio's risk. -Diversification will normally reduce the riskiness of aportfolio of stocks. -In portfolio analysis, we do not use ex-post (historical)returns and standard deviations because we are interested inex-ante (future) returns.