Statement

True

False

Because of the effects of diversification, the portfolio$$s risk is likely to be smaller than the average of all stocks$$ standard deviations.

The portfolio$$s risk is the weighted average of the individual stocks$$ standard deviations.

Portfolio risk will decline if more stocks that are negatively correlated with other stocks are added to the portfolio.

The market risk component of the total portfolio risk can be reduced by randomly adding stocks to the portfolio.