Question: Determine whether the statement in each of the next two questions is True or False. Diversification over a large number of stocks completely eliminates risk.

Determine whether the statement in each of the next two questions is True or False.

  1. Diversification over a large number of stocks completely eliminates risk.

True

False

2.The volatility of the market portfolio is smaller than the average volatility of the stocks in it.

True

False

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