Answer (D) is correct . The benefits of diversification become extremely small when more than 20 to 30 different securities are held. Moreover, commissions and other transaction costs increase with greater diversification.
Answer (A) is incorrect because The benefits of diversification do not diminish until about 20 to 30 different securities are held.
Answer (B) is incorrect because The benefits of diversification do not diminish until about 20 to 30 different securities are held.
Answer (C) is incorrect because The benefits of diversification do not diminish until about 20 to 30 different securities are held.
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