For diversified portfolios, which of the following is (are) false? a. the risk of a portfolio...

For diversified portfolios, which of the following is (are) false? a. the risk of a portfolio is less than the weighted average risk of the individual assets in the portfolio if the correlation coefficient is less than one. b. stock held in isolation is more risky than a stock held in a portfolio c. relevant risk of a stock is its contribution of risk to a portfolio d. the unique risk of a portfolio increases as more companies are added to the portfolio e. none of the above

Expert Solution

d. the unique risk of a portfolio increases as more companies are added to the portfolio

This is incorrect because unique risk decreases with addition of more companies to the portfolio

jeff jeffy answered 3 years ago

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