Question: Which statement about portfolio diversification is true? a. Proper diversification can reduce the total risk to zero. b. None of the options. c. The risk-reducing

  1. Which statement about portfolio diversification is true?

    a.

    Proper diversification can reduce the total risk to zero.
    b.

    None of the options.
    c.

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

    Proper diversification can eliminate systematic risk.
    e.

    Diversification could reduce a portfolio's total risk but does not affect the portfolio's expected return.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

Which statement about portfolio diversification is correct? a. Proper diversification can reduce or eliminate systematic risk. b. The risk-reducing benefits of diversification do not occur...

Q:

QUESTION 3 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...

Q:

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 if the...

Q:

Which statement about portfolio diversification is true? a. Because diversification reduces a portfolio's total risk, it also reduces the portfolio's expected return. b. None of the options. c. The...

Q:

Which statement about portfolio diversification is true? a. Proper diversification can eliminate systematic risk. b. None of the options. c. The risk-reducing benefits of diversification will not...

Q:

answer these mcqs asap. 5. 3 points) Which of the following statements about risk averse investors is true? (a) They only accept investmentsthat offer risk premium over the risk-free rate. (b) They...

Q:

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....

Q:

Which statement about portfolio diversification is correct? A. Proper diversification can reduce or eliminate systematic risk. B. Diversification reduces the portfolios expected return because it...

Q:

Which statement about portfolio diversification is correct? a. Proper diversification can partially eliminate systematic risk. b. The risk-reducing benefits of diversification do not occur...

Q:

Which statement about portfolio diversification is correct? A. Proper diversification can almost eliminate nonsystematic risk. B. The risk-reducing benefits of diversification do not occur...

Q:

Briefly describe the meaning and importance to auditing of the concept of due care.

Q:

What is MC1R Protein and Why is it Important?

Q:

Letipa borrowed $ 6 , 0 0 0 from her bank two years ago. The lown term is four years. Each yeat, she must repay the bank $ 1 5 0 0 plus the annual interest Which type of loan does the have? Muhple...

Q:

P-1) (100 Pts.) A chemical manufacturing company (CMC) has a contract for the procurement of the neccssaly chemicals from four suppliers. The chemicals purchased from Supplier A are priced at $20...

Q:

Acceptance of the key role of people in this process of adaptation.

Q:

preference for well defined job functions;

Q:

Facilitation of the learning and personal development of all people in the organization through a truly empowering culture.