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For financial risks, which is INCORRECT? 1. Systematic risks can be avoided using diversification strategies. 2. Assets with negatively correlated returns help reduce the riskiness

For financial risks, which is INCORRECT?

1. Systematic risks can be avoided using diversification strategies.

2. Assets with negatively correlated returns help reduce the riskiness of a portfolio.

3. Stocks A and B can both be correctly priced despite having different reward-to-risk ratios.

4. The reward for risk increases as diversifiable risk increases.

A.

Only 2

B.

Only 4

C.

3 and 4

D. 1,2,3
E. 1,3,4

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