The graph shows the relationship between risk, measured as the standard deviation of a stock portfolio's return, and the number of different stocks in the portfolio for a hypothetical stock market. (3) A50 E i E! 9.' g + :E40 3 I I: I 2% l1.\\ 53 II +...,_______ EZOII I +-I-+ g II I I I E II I I I 111 9'. II I I I 5 II I I I E O D 1 4 10 20 30 40 NUMBER OF STOCKS IN PORTFOLIO True or False: Increasing the number of stocks in a portfolio reduces market risk. 0 True 0 False Consider two stock portfolios. Portfolio Y consists of 20 different stocks from firms in different industries. Portfolio X consists of 10 different stocks, also from firms in different industries. The return on Portfolio Y is likely to be volatile than that of Portfolio X. Suppose a stock analyst recommends buying stock in the following companies: Company Industry Toyonda Automotive Saalvo Automotive GMW Automotive Honsubishi Automotive Shexxon Oil and gas Mobron Oil and gas Airing Aircraft Boebus Aircraft Goohoo Technology Pherk Pharmaceutical Each of the following portfolios contains four of the stock picks. Which portfolio is the least diversified? O Toyonda, Saalvo, GMW, Honsubishi O Boebus, Airing, Shexxon, Mobron O Toyonda, Honsubishi, Boebus, Airing O Pherk, Airing, Goohoo, Shexxon