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Which two of the following are typically NOT identified as benefits of diversification? 1. Reduction in portfolio risk without sacrificing expected returns. 2. A reduction
Which two of the following are typically NOT identified as benefits of diversification? 1. Reduction in portfolio risk without sacrificing expected returns. 2. A reduction in the rate of return of a riskless asset. 3. Reduction in total risk of the portfolio. 4. Reduction in unsystematic risk of the portfolio. 5. Reduction in systematic risk of the portfolio.
A. | 1 and 2. | |
B. | 3 and 4. | |
C. | 3 and 5. | |
D. | 2 and 5. | |
E. | No, in fact, none of the pairs suggested above makes sense. |
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