Which statement about portfolio diversification is correct?a. Proper diversification can reduce or eliminate systematic risk.b. Diversification reduces the portfolio’s expected return because it reduces a portfolio’s total risk.c. As more securities are added to a portfolio, total risk typically can be expected to fall at a decreasing rate.d. The risk-reducing benefits of diversification do not occur meaningfully until at least 30 individual securities are included in the portfolio.

Which statement about portfolio diversification is correct?a. Proper diversification can reduce or eliminate systematic risk.b. Diversification reduces the portfolio’s expected return because it reduces a portfolio’s total risk.c. As more securities are added to a portfolio, total risk typically can be expected to fall at a decreasing rate.d. The risk-reducing benefits of diversification do not occur meaningfully until at least 30 individual securities are included in the portfolio.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 5MC: You have been hired at the investment firm of Bowers & Noon. One of its clients doesn’t understand...

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