Which of the following is not correct?
A)A risk averse person might be willing to hold stocks.
B)Other things the same, a portfolio with the stocks of a large number of companies has less risk.
C)Other things the same, the larger a portion of savings a person invests in stocks, the greater their expected return.
D)Diversification can eliminate market risk but not firm-specific risk.

Question

Quizplus · Accepted Answer

Diversification can eliminate firm-specific risk but not market risk. Market risk affects all companies and cannot be eliminated through diversification.

Which of the Following Is Not Correct