Which of the Following Statements Best Describes Risk

Multiple Choice

Which of the following statements best describes risk?

A) An investor can eliminate virtually all market risk if he or she holds a very large and well- diversified portfolio of stocks.
B) The higher the correlation between the stocks in a portfolio, the lower the risk inherent in the portfolio.
C) It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock.
D) An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.