Question: Diversification works because: Select one: a. Stocks earn higher returns than bonds. b. Portfolios have higher returns than individual assets. c. Firm-specific risk can be

Diversification works because: Select one: a. Stocks earn higher returns than bonds. b. Portfolios have higher returns than individual assets. c. Firm-specific risk can be never be reduced. d. Unsystematic risk exists. e. Forming stocks into portfolios reduces the standard deviation of returns for each stock

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