Answer (B) is correct . In principle, diversifiable risk should continue to decrease as the number of different securities held increases. In practice, however, the benefits of diversification become extremely small when more than about 20 to 30 different securities are held.
Answer (A) is incorrect because In principle, diversifiable risk should continue to decrease as the number of different securities held increases. In practice, however, the benefits of diversification become extremely small when more than about 20 to 30 different securities are held.
Answer (C) is incorrect because In principle, diversifiable risk should continue to decrease as the number of different securities held increases. In practice, however, the benefits of diversification become extremely small when more than about 20 to 30 different securities are held.
Answer (D) is incorrect because In principle, diversifiable risk should continue to decrease as the number of different securities held increases. In practice, however, the benefits of diversification become extremely small when more than about 20 to 30 different securities are held.
|
