Multiple Choice
Which of the following is correct concerning diversification?
A) It only reduces firm-specific risk,but most of the reduction comes from increasing the number of stocks in a portfolio to well above 30.
B) It only reduces firm-specific risk;much of the reduction comes from increasing the number of stocks in a portfolio from 1 to 30.
C) It only reduces market risk,but most of the reduction comes from increasing the number of stocks in a portfolio to well above 30.
D) None of the above is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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