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Which of the following statements is TRUE? A. When we combine many stocks in a large portfolio, the market risks for each stock will average

Which of the following statements is TRUE?

A. When we combine many stocks in a large portfolio, the market risks for each stock will average out and be diversified.

B. The risk premium of a security is determined by its total risk.

C. The volatility in a large portfolio will decline until only the market risk remains.

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