Question: Choose the correct answers about diversification: Only systematic risk can be diversified, individual risk cannot be diversified because it is unique to each company. To
Choose the correct answers about diversification:
Only systematic risk can be diversified, individual risk cannot be diversified because it is unique to each company.
To diversify systematic risk, we need to allocate more weight to lowvolatility stocks and less to highvolatility stocks.
A diversified portfolio of stocks will have less volatile returns than individual stocks because systematic risk is diversified.
"High risk, high return" in academia, the risk refers to systematic risk.
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