Question: QUESTION 7 Which statement about portfolio diversification is true? a. Proper diversification can eliminate systematic risk. b. The risk-reducing benefits of diversification will not occur

QUESTION 7

  1. Which statement about portfolio diversification is true?

    a.

    Proper diversification can eliminate systematic risk.
    b.

    The risk-reducing benefits of diversification will not occur if the risky assets are not correlated .
    c.

    Because diversification reduces a portfolio's total risk, it also reduces the portfolio's expected return.
    d.

    None of the options.
    e.

    Proper diversification can reduce the total risk to zero.

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