

MCQOPTIONS
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1. |
The principle of diversification tells us that |
A. | spreading an investment across many diverse assets will eliminate some of the total risk |
B. | concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk |
C. | spreading an investment across five diverse companies will not lower the total risk |
D. | concentrating an investment in three companies all within the same industry will greatly reduce the systematic risk |
Answer» B. concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk | |