T/F

-Portfolio A has one security, while Portfolio B has 100 securities. Portfolio A will be less risky.

-Portfolio A has only one stock, while Portfolio B comprises all stocks that trade in the market, each held in proportion to its market value. Because of its diversification, Portfolio B will have only market risk.

-A portfolio's risk is measured by the weighted average of the standard deviations of the securities in the portfolio plus the correlations of returns between each security in the portfolio.

-Even if the correlation between the returns on two securities is +1.0, even if the securities are combined in the correct proportions, the resulting 2-asset portfolio will have the same as either security held alone.

-Bad managerial judgments or unforeseen negative events that happen to a firm are defined as "company-specific," or "unsystematic," events and their effects on investment risk can, in theory, be diversified away.