Which of the following statements is correct? A large portfolio of randomly selected stocks will have a standard deviation of returns that is greater than the standard deviation of a one-stock portfolio if that one stock has a beta less than 1.0. If you add enough randomly selected stocks to a portfolio, you can completely eliminate all of the market risk from the portfolio. A large portfolio of randomly selected stocks will always have a standard deviation of returns that is less than the standard deviation of a portfolio with fewer stocks, regardless of how the stocks in the smaller portfolio are selected. Company-specific (or diversifiable) risk can be reduced by forming a large portfolio, but normally even highly diversified portfolios are subject to market (or systematic) risk. As investors become risk averse, the market risk premium and SML becomes Less, decreases, steeper. Less, increases, flatter More, increases, steeper More, decreases, flatter