(b) (c) Explain how can a portfolio's risk be reduced through diversification? Is there any limit on the benefits of diversification? Explain. ABC has a standard deviation of 42 percent per year and a beta of 0.2 while XYZ has a standard deviation of 25 percent and a beta of 0.8. Which stock is a safer investment for a diversified investor? Explain. < During the years from 2016 to 2020, the return of Ace Ltd and the S&P 500 are as follows: Ace Ltd S&P 500 2016 0.25 0.22 2017 0.11 0.15 2018 0.03 0.06 2019 0.17 0.15 2020 0.1 0.14 Calculate the average return and standard deviation of Ace Ltd and the S&P 500. Which one is a better investment?