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3) What best explains the relationship between risk and return for a portfolio of stocks as compared to individual stock? a. Individual stocks should have

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3) What best explains the relationship between risk and return for a portfolio of stocks as compared to individual stock? a. Individual stocks should have a clear linear relationship between risk and return while a portfolio of stocks will not because individual stocks are composed of only systematic risk b. A portfolio of stocks should have a clear linear relationship between risk and return while individual stocks will not because a portfolio isolates idiosyncratic risk c. Individual stocks should have a clear linear relationship between risk and return while a portfolio of stocks will not because individual stocks are composed of only firm-specific risk d. A portfolio of stocks should have a clear linear relationship between risk and return while individual stocks will not because a portfolio isolates systematic risk

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