PORTFOLIO RISK 25 20 15 10 5 - 1 0 15 30 45 60 75 90 105 120 135 150 NUMBER OF STOCKS IN THE PORTFOLIO Based on the data presented in the previous graph, which of the following statements are true? Check all that apply. The market portfolio would have a standard deviation of 10%. A portfolio of 60 stocks has a diversifiable risk of 4%. As the portfolio's size increases, its market risk decreases. A portfolio of 120 or more stocks could eliminate almost half of the risk. The market portfolio would have a standard deviation of about 20%. The benchmark for a well-diversified stock portfolio is the market portfolio, which is a portfolio containing all stocks. The relevant risk of an individual stock is measured by its beta coefficient, which is defined under the Capital Asset Pricing Model (CAPM) as the amount of risk that the stock contributes to the well-diversified portfolio. Based on your understanding of the CAPM and beta, answer the following question: Which of the following statements about stock's correlation with the market is true? A stock with low stand-alone risk will tend to destabilize the portfolio. A stock with a high correlation with the market is risky. A stock with a low correlation with the market is risky