You are currently invested in only one stock X and you want to gain from diversification benefits. In which of the following stocks would you invest. Assume the expected return and std of the stocks equals stock X?

options:

	None of the answers is correct
	Stock C with: XC=0
	Stock D with: XD= -.09
	Stock B with: XB=.5
	Stock A with: XA=1.0

Which of the following statements is correct?

options:

	The standard deviation of a portfolio can never be less than the smallest assets standard deviation in the portfolio.
	The standard deviation of a portfolio can be lower than the smallest assets standard deviation in the portfolio.
	The expected return of a portfolio which has a positive investment in each of the assets it contains is less than the smallest assets return in the portfolio.
	The portfolio beta (bP) can be less than the smallest beta in the portfolio because bP is a weighted average of the individual asset betas.
	None of the answers is correct