Which of the following is/are true about portfolio diversification ? You can diversify away almost all of a portfolio's specific risk (or unsystematic risk) but can't get rid of systematic risk ( or market risk). If you have a small portfolio, adding only a few stocks can lower overall portfolio risk (standard deviation) substantially. Adding a handful of stocks to a large portfolio (say, over 150 stocks) is likely to lower portfolio risk very little. C. Diversifying a portfolio can bring about benefits by reducing our portfolio's risk ., standard deviation). However, whenever we lower the risk of a portfolio, this will always come at the cost of a lower expected return. D. The benefits of diversification are generated by adding assets to our portfolio which have lower standard deviations than the average asset in our portfolio. Since portfolio standard deviation is a weighted average of the standard deviations of the individual assets, this will always lower our portfolio risk . E. Both A and B are true. F. Both C and D true. G Choices A-D are all true. Put all eggs Stocks More