Diversifying to reduce volatility is a:
A) good idea only if shareholders can hold a diversified portfolio.
B) good idea only if managers cannot hold a diversified portfolio.
C) good idea only if managers can hold a diversified portfolio.
D) good idea only if shareholders cannot hold a diversified portfolio.

Question

Quizplus · Accepted Answer

Diversifying to reduce volatility is beneficial if shareholders cannot hold a diversified portfolio themselves, as it helps in spreading risk across different investments.

Diversifying to Reduce Volatility Is A