Which of the following statements about the Portfolio Theory section of the lecture material are TRUE:

1. The standard deviation of a portfolio of shares in two different companies will always be less than the weighted average of the standard deviations of the individual shares.
2. A share portfolio that follows a diversified market index is expected to offer a reasonably efficient trade-off between expected return and risk.

Neither of the statements are true (both are false)

Only statement 1 is true

Only statement 2 is true

Both statements are true (neither are false)