Which of the Following Statements Is True in the Context

Multiple Choice

Which of the following statements is true in the context of diversification?

A) As long as the return on different investments is not perfectly positively correlated, financial intermediaries can diversify away significant amounts of portfolio risk.
B) As long as the return on different investments is not perfectly negatively correlated, financial intermediaries can diversify away significant amounts of portfolio risk.
C) As long as the return on different investments is perfectly positively correlated, financial intermediaries can diversify away significant amounts of portfolio risk.
D) None of the listed options are correct.