Which of the following statement is incorrect? Most investors avoid risk if they can, unless they are compensated for accepting risk. Most of the answers are correct. If Asset A and Asset B has perfect negative correlation (r = -1.0), then the risk associated with each asset can be nearly eliminated by combining the two assets into one portfolio. Nondiversifiable risk arises due to market risk factors such as the inflation and real gross domestic product changes. The coefficient of variation is a numerical indicator of how widely dispersed the possible values are around a mean.