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Suppose Emma holds a well-diversified stock portfolio. Her son, Andrew, who is a portfolio manager, has just advised her not to invest in stocks of

Suppose Emma holds a well-diversified stock portfolio. Her son, Andrew, who is a portfolio manager, has just advised her not to invest in stocks of oil refining industry because their prices tend to have much higher volatility relative to other stocks. Is Andrews advice sound? Explain. (6 marks)

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