The Idea That There Is a Limit to the Reduction

Multiple Choice

The idea that there is a limit to the reduction of portfolio risk due to diversification is

A) contradicted by both the CAPM and the single-index model.
B) contradicted by the CAPM.
C) contradicted by the single-index model.
D) supported in theory, but not supported empirically.
E) supported both in theory and by empirical evidence.