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7. (Multiple-choice, 4 points) Which of the following is a correct interpretation on the graph? 0.44 Swiss stocks Portfolio Risk (%) 0.27 U.S. stocks 0.12

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7. (Multiple-choice, 4 points) Which of the following is a correct interpretation on the graph? 0.44 Swiss stocks Portfolio Risk (%) 0.27 U.S. stocks 0.12 1 10 20 30 International stocks 40 50 Number of Stocks a. International portfolio diversification can achieve a greater portfolio risk reduction than domestic portfolio diversification. b. Domestic portfolio diversification does not reduce portfolio risk. c. As the portfolio holds more and more stocks, the portfolio risk steadily increases. d. The portfolio risk can be fully eliminated through international portfolio diversification

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