Which Statement About Risk Is True

Multiple Choice

Which statement about risk is true?

A) An investor can eliminate virtually all market risk if he or she holds a very large and well-diversified portfolio of stocks.
B) The higher the correlation between the stocks in a portfolio, the lower the risk inherent in the portfolio.
C) 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.
D) An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.