Which of the Following Is a Correct Statement About Diversification

Multiple Choice

Which of the following is a correct statement about diversification?

A) Most diversification benefits are realized with just 10 stocks.
B) Diversification is the process of reducing the riskiness associated with individual assets by spreading an investment across numerous assets.
C) Diversifiable risk is the only risk that matters to a rational investor.
D) When a stock is combined into a portfolio, the standard deviation of that portfolio remains unchanged.
E) There is no limit to the amount of risk that can be eliminated through diversification.