Which of the Following Statements Is True

Multiple Choice

Which of the following statements is true?

A) The more diversified a financial intermediary, the higher the probability that it will default on its obligations and the more risky and illiquid the claims.
B) The less diversified a financial intermediary, the higher the probability that it will default on its obligations and the more risky and illiquid the claims.
C) The more diversified a financial intermediary, the lower the probability that it will default on its obligations and the more risky but also the more liquid the claims.
D) The more diversified a financial intermediary, the higher the probability that it will default on its obligations and the more risky but also the more liquid the claims.