Question: Diversification works because: Select one: O a. Stocks earn higher returns than bonds. O b. Forming stocks into portfolios reduces the standard deviation of returns

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

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