How might your decision be affected if, rather than buying one stock for $0.8 million, you could construct a portfolio consisting of 100 stocks with $8,000 invested in each? Each of these stocks has the same return characteristics as the one stock - that is, a 50-50 chance of being worth zero or $19,200 at year-end. I. Investing in a portfolio of stocks would definitely be a deterioration over investing in the single stock. II. Investing in a portfolio of stocks would definitely be an improvement over investing in the single stock. III. The situation would be unchanged. Would the correlation between returns on these stocks matter?