Question: Are the following statements true, false or uncertain? Briefly explain your answer. (a) Diversification over a large number of assets completely eliminates risk. (b)

Are the following statements true, false or uncertain? Briefly explain your answer. (a) Diversification over a large number of assets completely eliminates risk. (b) Diversification works only when asset returns are uncorrelated. (c) A stock with high standard deviation may contribute less to portfolio risk than a stock with lower standard deviation. (d) Diversification reduces the expected return on the portfolio as its risk decreases.

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