Question: Which of the following is a false statement for diversification? Diversification is one of the assumptions for APT The nonsystematic risk of a well diversifier

Which of the following is a false statement for diversification?

  1. Diversification is one of the assumptions for APT
  2. The nonsystematic risk of a well diversifier portfolio approached zero
  3. The firm specific risk of individual assets approach zero within a well diversified portfolio
  4. The firm specific risk can never truly reach zero no matter how diversified a portfolio is

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