If the Single Index Model is correct, then as a portfolio is broadly diversified, the variance of the return on the portfolio:

A:Should fall, and the residual variance should be negative.

B:Should fall, but the residual variance should remain constant.

C:Should usually fall, and the residual variance should be approximately equal to zero.

D:Should rise, with the residual variance being approximately equal to zero.

E:Should not be changed.