Which of a) through c) is FALSE?

Question

Quizplus · Accepted Answer

A) is true because in a diversified portfolio, the risk of an individual asset is indeed determined by its covariance with other assets, reflecting how its returns move in relation to the returns of other assets in the portfolio. B) is false because as the number of assets in a portfolio increases, the individual asset variances become less significant, and it's the covariance terms that matter for understanding how the assets interact with each other, but they do not dominate in the sense of increasing risk; rather, they help in understanding the diversification effect. C) is true because the benefit of diversification, in terms of risk reduction, is highly dependent on the correlation between the assets; lower correlation between the assets leads to greater risk reduction.

Which of A) Through C) Is FALSE