1. Which one of the following statements is correct?

1. 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.
2. A large portfolio of randomly selected stocks will have a standard deviation of returns that is lower than the standard deviation of an individual stock even if that individual stock has a beta less than 1.
3. A large portfolio of stocks whose betas are greater than 1 will have less market risk than a single stock with a beta of 0.8.
4. If you add enough randomly selected stocks to a portfolio, you can completely eliminate all of the market risk from the portfolio.
5. None of the above is correct.