[Answer] Which of the following statements is CORRECT?a. An investor can eliminate virtually all stand-alone risk if he or she holds a very large and well diversified portfolio of stocks.b. The higher the correlation between the stocks in a portfolio the lower the risk inherent in the portfolio.c. It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock.d. Once a portfolio has about 40 stocks adding additional stocks will not reduce its risk by even a small amount.e. An investor can eliminate virtually all diversifiable risk if he or she holds a very large well-diversified portfolio of stocks.

Answer: e. An investor can eliminate virtually all diversifiable risk if he or she holds a very large well-diversified portfolio of stocks.

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Which of the following statements is CORRECT?a. An investor can eliminate virtually all stand-alone risk if he or she holds a very large and well diversified portfolio of stocks.b. The higher the correlation between the stocks in a portfolio the lower the risk inherent in the portfolio.c. It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock.d. Once a portfolio has about 40 stocks adding additional stocks will not reduce its risk by even a small amount.e. An investor can eliminate virtually all diversifiable risk if he or she holds a very large well-diversified portfolio of stocks. Ad See the Difference of a Personalized Approach. Eligible for Investments of $50k+ News & research: Alerts · Mutual Funds · Stocks · ETFs · Options · Markets & Sectors Once a portfolio has about 40 stocks adding additional stocks will not reduce its risk by even a small amount. Feedback The correct answer is: An investor can eliminate virtually all diversifiable risk if he or she holds a very large well-diversified portfolio of stocks . Finance Chapter 8: Risk and Rates of Return. STUDY. Flashcards. Learn. Write. Spell. Test. ... It is possible to have a situation in which the market risk of a single stock is less than the market risk of a portfolio of stocks . ... Adding more stocks to your portfolio reduces the beta of your portfolio. C ) Adding more stocks to your portfolio ... c. Once a portfolio has about 40 stocks adding additional stocks will not reduce its risk by even a small amount. d. An investor can eliminate almost all diversifiable risk if he or she holds a very large wel...

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