Question
The principle of diversification tells us that Select one: a.the riskiness of a portfolio will decrease exponentially if we add to the portfolio assets with
The principle of diversification tells us that
Select one:
a.the riskiness of a portfolio will decrease exponentially if we add to the portfolio assets with low standard deviations.
b.total risk of a portfolio will be reduced by lowering its unsystematic risk.
c.total risk of a portfolio can be eliminated by including as many stocks with different levels of systematic risk as possible.
d.the addition of more stocks from different industries will always reduce the risk in a portfolio.
e.an index fund is the best investment due to its well-diversified portfolio.
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