Question: Which statement is True ? A. A single stock contains significant idiosyncratic risk. So as more stocks are added to a portfolio, idiosyncratic risk increases.

Which statement is True ?

A. A single stock contains significant idiosyncratic risk. So as more stocks are added to a portfolio, idiosyncratic risk increases.

B. Proper diversification can eliminate systematic risk.

C. The measure of risk for a security held in a diversified portfolio is standard deviation.

D. All of these statements are false

E. Diversification always reduces the portfolio's expected return because it reduces the portfolio's total risk.

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