Which of the following is a correct statement about diversification?

Question 36 options:

	Diversification is least effective when security returns are always moving in opposite directions.
	It is possible to form a portfolio with zero risk if two perfectly negatively correlated securities are available.
	When a stock is combined into a portfolio, the standard deviation of that portfolio always remains unchanged.
	There is no limit to the amount of risk that can be eliminated through diversification.

Question 37 (1 point)