QUESTION 4

Which of the following is true about diversification?

		diversification increases alpha
		diversification eliminates risk
		diversification increases Sharpe ratios
		diversification increases returns

QUESTION 6

If an investor that owns a portfolio with 3 stocks increases their portfolio to 30 stocks, which of the following is MOST LIKELY to happen?

		the Sharpe ratio would decrease
		the Sharpe ratio would increase
		return would increase
		risk would increase