Celastila Moonn, a GLBAAF 301 student at UMB, made the following statements after finishing the week five readings.

Statement 1: Because of their ability to hedge, the subprime mortgage crisis did not cause any significant losses to hedge funds.

Statement 2: Maintaining a diversified loan portfolio helps a bank reduce systematic credit risk.

With respect to above statements, is Moonn correct?

A.

No, only statement 1 is correct

B.

Yes

C.

No