Question: Which statement about portfolio diversification is correct? (a) Proper diversification can reduce or eliminate idiosyncratic risk. (b) Proper diversification can reduce or eliminate systematic risk.

Which statement about portfolio diversification is correct?
(a) Proper diversification can reduce or eliminate idiosyncratic risk.
(b) Proper diversification can reduce or eliminate systematic risk.
(c) Proper diversification reduces the portfolios expected return because it reduces a portfolios total risk.
(d) The risk-reducing benefits of diversification do not occur meaningfully until at least 30 individual securities are included in the portfolio.

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