QUESTION $3$

If you randomly select stocks and add them to your portfolio that currently consists of $5$ stocks, which of the following statements best describes what you should expect?

a$.$ Adding more such stocks will reduce the portfolio's market risk but not its diversifiable risk.

b$.$ Adding more such stocks will reduce the portfolio's diversifiable risk.

c$.$ Adding more such stocks will have no effect on the portfolio's risk.

d$.$ Adding more such stocks will reduce the portfolio's expected rate of return.