Individual investors:
A) Should expect to earn a rate of return based on the total risk of their portfolios.
B) Need to own at least 50 stocks if they wish to create a diversiﬁed portfolio.
C) Are responsible for eliminating unsystematic risk.
D) Can create a portfolio such that the portfolio beta is less than the lowest beta of any security held in the portfolio.
E) Can generally create a diversiﬁed portfolio of risky assets such that the standard deviation of the portfolio equals zero.

Question

Quizplus · Accepted Answer

Individual investors can eliminate unsystematic risk through diversification, which is the risk specific to individual assets.

Individual Investors