13.

Which of the following statements is CORRECT? a. A large portfolio of randomly selected stocks will always have a standard deviation of returns that is less than the standard deviation of a portfolio with fewer stocks, regardless of how the stocks in the smaller portfolio are selected O b. Diversifiable risk can be reduced by forming a large portfolio, but normally even highly diversified portfolios are subject to market for systematerisk A large portfolio of stocks whose betas are greater than 1.0 will have less market risk than a single stock with a beta - 08 c. Alarge portfolio of randomly selected stocks will have a standard deviation of returns that is greater than the standard deviation of a stock portfolio If that one stock has a beca less than 10. you add enough randomly selected stocks to a portfolio, you can completely eliminate all of the market risk from the portfolio