Which of the Following Is True of Financial Diversification

Multiple Choice

Which of the following is true of financial diversification?

A) Corporate and state laws allow individuals to hold securities only within one market sector and for short periods.
B) The practice of holding assorted securities in different sectors is considered highly risky.
C) Holding diversified portfolios proves to be cost-effective.
D) Investing in a large number of individual securities is time consuming than investing in exchange-traded funds.