Question: If you construct a well-diversified portfolio, its beta will be reduced below the value of any individual securitys beta: A) It is true, because beta

If you construct a well-diversified portfolio, its beta will be reduced below the value of any individual securitys beta:

A) It is true, because beta reduction is a benefit of diversification

B) It is true only for high beta securities

C) It is not true, because portfolio beta is weighted average of individual beta

D) It is not true only for the stocks with high firm specific risk

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