Which of the Following Statements Is CORRECT

Multiple Choice

Which of the following statements is CORRECT?

A) The higher the correlation between the stocks in a portfolio, the lower the risk inherent in the portfolio.
B) 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.
C) Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount.
D) An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
E) An investor can eliminate virtually all market risk if he or she holds a very large and well-diversified portfolio of stocks.